Energy regulator Ofgem launched a consultation last week (8 February) to determine whether changes should be made to the electricity generation licence to ensure that it is fit for purpose for assets classed as generation but provide network services.
The consultation, which will close on 10 March, asks for industry members interested in generation licences or how network services are provided to the system operator to submit responses.
According to the consultation outline, Ofgem disclosed that the procurement of network services is a key element of National Grid ESO’s strategy for maintaining operability in a zero-carbon electricity system.
The procurement of services from commercial parties, such as has been conducted by ESO through its pathfinder tenders, has raised questions on the appropriate regulatory treatment of the assets delivering network services uncoupled from energy generation.
In doing so, Ofgem is consulting on several different potential changes. One of which includes the proper application of the current Electricity generation Licence to synchronous condensers and other network service assets with similar technical operations.
Currently, synchronous condensers, a DC-excited synchronous machine whose shaft is not attached to any driving equipment, are the only technology granted licenses for this purpose.
As such, Ofgem said it was “keen” to recognise that innovation through commercial offerings means that new technologies might come forward to provide these services to ESO in the future. To ensure this does not cripple innovation, the energy regulator intends to use a definition recognising the role of the asset in relation to the operation of the national electricity transmission system (NETS).
Interestingly, the consultation outlined that Standard Condition 14 of the Generation Licence is unsuitable because it does not recognise the potential for substantive capability added to the system from the assets considered under the scope. Ofgem is thus seeking views on the proposals.
