On the 1 October National Grid ESO launched its new frequency response service, Dynamic Containment. This is the first in a suite of new, faster-acting response services, designed to address significant deviations when they occur on the transmission system.
The roll-out of this new post-fault response service aims to help respond to frequency events faster. It should see the ESO make fewer interventions to manage frequency, with the stated aim to lower overall balancing costs.
The first month of this new service was examined by Cornwall Insight to see how it faired.
Key findings*
- Six parties accepted with overall nine battery units are participating.
- To date 3,916MW has been procured with daily accepted service volumes averaging 186MW per day.
- Prices have ranged between £11.4-17.0/MW/hr, with an average price of £16.7/MW/hr.
Joe Camish, Analyst at Cornwall Insight, said:
“Although all technology types can participate, batteries were anticipated to make up the majority of the providers, primarily due to their fast response times. At the time of writing, the DC service has seen six parties accepted; these are, EDF Energy, Flexitricity, Habitat Energy, Arenko, Sembcorp Energy and Zenobe Energy.
“The prices are relatively high, particularly when compared to the accepted prices in the alternative response markets available to the ESO. Monthly tendered Dynamic Frequency Firm Response (FFR) prices for October averaged at £6.7/MW/hr and have hovered around this level for much of this year. The weekly procured Dynamic Low High service averaged £8.2/MW/hr this month.
“It is important to note these prices are not directly comparable due to the differences in procurement, contract lengths, market size/maturity and use of a pay-as-clear method in weekly services. Despite this, it is interesting to see the differences in prices compared to alternative response markets and how the competition is starting to develop in the DC market.
“As the service is an exclusive one for the assets involved, a premium is likely to be attached. Many of the companies participating so far also have battery assets operating across various revenue streams in the market. They may be scoping out the benefits of exclusive DC service against the revenue stacking approach deployed elsewhere.”
About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
