Why we need a flexible future?

06/05/2021

Blog by Graham Campbell, Head of Whole Systems & Commercial

We are delighted to have already secured 193MW of flexibility services from our flex tenders in 2019/20, and on Friday 30 April we launched our 2021 spring tender, seeking a further 1.4GW across our SP Distribution and SP Manweb license areas.

But what is flexibility and why is it important?

Essentially, its where we pay a third party to operate their assets in a way that can benefit the network. We’re contracting with all sorts of flexible resources; such as generators, storage providers, aggregators of domestic low carbon technologies (LCTs) and even suppliers. Under these arrangements, we’d ask them to either lower or increase their use depending on the needs of the network, to allow us to free up capacity for use elsewhere or to utilise excess generation.  

The needs of our customers and communities are constantly changing, so the requirements of our electricity network are too. We’re forecasting more and more constraints as a result of the uptake of LCTs, particularly during periods of high demand. Flexibility therefore provides an agile, smart means of balancing our network to solve the challenges we face.

And whilst there are clearly benefits for us, there are also benefits for our customers too. By deploying flexibility, we’re able to defer or avoid costly reinforcement, thus minimising the impact on consumer bills. And for those providing flexibility, there is also the added bonus of being paid for that service. 

Flexibility is also a key enabler to maximising the number of connections that can be made to the network, all of which contribute to achieving net zero.

So, what does it mean for our business?

As we shift our focus to the green economic recovery and our continued efforts to help the UK, Scottish, Welsh and regional administrations achieve those ambitious net zero targets, finding smarter ways to manage our network is ever more critical. Ofgem, who are our regulator, see flexibility as the primary means for addressing constraints, and we know it’s a critical part of our network of the future – particularly throughout the ED2 price control period from 2023 – 2028. 

The flexibility market is developing at pace and is a clear means of maximising network utilisation. That’s why we were delighted to join forces with other UK DNOs to launch the Flexible Power platform last year, to help streamline the process for providers and ensure consistency across the market. Flexible Power is a platform that provides us with the ability to simply and readily utilise the flexibility contracts we have, from scheduling resources, to dispatching services and settling any monies due. You can check it out here. Truly collaborative efforts like these remove barriers for market participants and make it easier for them to access flexibility opportunities across the UK.

It’s also the reason one of our flagship innovation projects is focused on flexibility too. Our Network Innovation Competition (NIC) funded FUSION project is trialling local demand-side flexibility to test the effectiveness of the Universal Smart Energy Framework (USEF), which is already being implemented in Europe. Whilst not widely used in the UK thus far, USEF provides a standardised approach for the trading and commoditisation of flexibility. This means FUSION is helping us play our part in supporting the streamlining of the flexibility market, which the Energy Networks Association’s Open Networks Project is actively focused on. Flexibility is a real part of what we do – a critical part of our “toolkit” for operating the system efficiently, whilst continuing to meet our customers’ ever evolving needs.

Our priority is always to continue to provide a safe, reliable and resilient network for our customers and communities, whilst supporting the decarbonisation ambitions for the country. Given the focus on all things climate change as we look forward to the COP26 United Nations Climate Change Conference this year, it’s a timely industry development to be a part of.

Find out more about our flexibility work and tenders via the link below:

And here’s a short video showing a typical day in the life of a customer in a flexibility world:

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