Balancing electricity supply and demand is the primary role of electricity system operators (ESOs). ESOs work to maintain a standard grid frequency at which power system equipment and consumer devices are designed to operate safely (50 Hz in Europe, for example, and 60 Hz in the United States). This task is an important one, because a frequency deviation above or below a certain amount (say, 2.5 %) will result in full or partial blackouts.
ESOs use balancing platforms to optimize energy management through a process called economic dispatch. Through these platforms, ESOs can monitor and control grid frequency in real time, replace resources (demand/generation/aggregated asset that can place energy into or withdraw energy from the power system on instruction from ESO or triggered automatically through frequency relay) used to restore frequency from large events with low-cost reserve resources, and control voltage to keep the lights on. ESOs procure the required amount of resources to implement the above actions days, months, or years ahead of time through bilateral arrangements with balancing service providers (resource owners, aggregators) and a real-time balancing market which is part of the balancing platform.
Balancing the grid has been challenging due to rapid changes in energy ecosystem, such as the increasing penetration of renewable energy, battery storage systems, decarbonization of heat and transport, and decentralization. Unless sufficient measures are taken now to manage these changes, grid stability could be jeopardized and energy costs could continue to rise. To manage such changes, grid operators are looking to source the balancing energy from abundantly available smaller providers, who are the primary owners and aggregators of distributed energy resources (DER) and demand-side-response (DSR) assets.
Right now, the service providers who participate in the balancing markets are mainly large generators — those capable of investing in dedicated communication facilities to manage technical and commercial data transfers, and receive instructions from operators securely, over landlines in real time. But smaller, low-carbon and green energy providers would need easy and economical access to these markets if we want to meet climate agreements and carbon-reduction targets.
System operators of transmission and distribution networks are currently trying to reduce network-development costs while promoting green energy and managing network constraints through opening markets to more flexibility providers. Utilities are working to leverage modern information technologies (IT) and commercial arrangements to overcome the market challenges faced by both utilities and service providers. We are witnessing an interesting solution in the UK now. National Grid, an energy provider with whom Wipro has been working with for many years, just announced their new IT interface which, according to their website, “widens balancing mechanism access for smaller generators.”
The new application programming interface (API) is a promising solution to the challenges described above. Because it is web-based, it is more accessible than fixed-line alternatives, making it easier for smaller providers to join Great Britain’s balancing mechanism market. The API’s flexibility also makes it easier and more economical to manage common operability challenges.
This web-based platform is a timely solution for the energy industry. It offers systems operators (transmission and distribution operators, ESOs) greater flexibility with sourcing (from DERs and DSRs, to aggregators and other service providers). It also offers more economical control when balancing systems, managing network constraints, and in other business areas through greater and wider market participation.
Congratulations to National Grid ESO and its teams for introducing this revolutionary technology to Great Britain’s grid value chain. It will be a useful tool in the industry’s ongoing efforts to increase customer value and promote carbon-neutral businesses.
Beyond technologies, I think network operators and ESOs should prioritize the following points to truly innovate their balancing and network constraints/capacity markets:
- Facilitate access to markets for flexible providers through economical and web-based IT solutions
- Leverage existing IT investments to open markets to new services
- Implement common local and national markets for collaborative balancing and network constraints markets
- Integrate DSOs network participants and ESO balancing markets to coordinate the participation of flexibility assets embedded inside DSOs and manage temporary constraints and restrictions while enabling benefits to flexibility providers.