There is a need to deliver an optimally coordinated design approach between ANM schemes and balancing services markets. It is important to ascertain and understand the synergies and conflicts associated with the potential for ANM schemes in networks inhibiting the delivery of ESO system support services through DER.
Objectives
The key objectives of this work can be described as follows:
- To identify and define different optimal T&D coordinated ANM schemes, their associated technical and commercial requirements as well as compatibility with existing industry codes and regulatory frameworks;
- To develop test cases and evaluate the ability of DER to participate in the ANM functions of the distribution system or in whole system balancing actions in a coordinated manner;
- To identify and define solutions that will optimize the coordination of ANM schemes with the balancing services market;
- To develop a delivery plan for deployment of the solutions
- To disseminate findings and recommendations to other network licensees.
Learnings
Outcomes
The project’s outcomes were delivered through six workstreams as detailed below:
WS1 looked to identify and review current ANM schemes, their associated technical and commercial arrangements, and the risks which arise if ANM systems are uncoordinated with Balancing Services. It also assessed any coordination between ANM systems and Balancing Services currently in place, and the planned future development of ANM schemes.
RANGE AND SCALE OF ANM SCHEMES:
Desk top research found that ANM schemes are becoming increasingly widespread on GB distribution networks, alongside the development of some schemes on the transmission network. The schemes vary in complexity and scale, but all have a similar purpose: to enable generation to connect to the transmission or distribution network more quickly and at lower cost by actively managing generation output to avoid breaching existing network limits, rather than undertaking network reinforcement.
Data provided by DNOs shows, as of January 2021, 6.7GW of generation was connected, or had accepted an offer to connect, to distribution ANM schemes. Most of that generation is renewable (primarily wind and solar) but there are some other technologies including gas generation. There is also at least 7GW of generation connected to the distribution network behind ANM constraints but whose output is not managed by the ANM system
RISKS OF UNCOORDINATED ANM SCHEMES
Coordination risks arise in instances where NG ESO procures Balancing Services from distributed assets that are behind network constraints managed by ANM schemes. Issues are most notable if the ANM scheme takes an action to manage generation in a given area which directly counteracts the effect of a Balancing Service procured by NG ESO – for example one generator increases output as instructed by NG ESO but in response the ANM scheme curtails another. This presents a risk to security of supply. It also increases costs to consumers as NG ESO must instruct another generator elsewhere to increase output to achieve the outcome it requires.
The main risks identified are:
- Risk of non-delivery by ANM generators
ANM generators may be curtailed when called to provide Balancing Services, and as such could be exposed to non-delivery penalties (depending on the service).
- Risk of unnecessary restrictions
ANM generators could be unnecessarily restricted from participating in Balancing Services (a recent example being ODFM, which explicitly excludes ANM generators). Actual curtailment levels may be very low, and a generator may in theory be able to participate in the service with little or no impact on delivery due to ANM. This restriction on market liquidity could increase costs for consumers.
- Counteraction risk
Non-curtailable generators can provide Balancing Services, but NG ESO may see the effect of procuring services from such generators counteracted by an ANM scheme curtailing (or realising curtailment on) an ANM generator. The non-curtailable generator does not face non-delivery penalties, but the net effect is not that desired by NG ESO, so further services will have to be called, increasing consumer costs. Risk of over-reaction
In some instances, a generator ramping output to provide a Balancing Service may do so faster than an ANM generator can ramp down. In this case, the ANM system may be forced to trip the ANM generator entirely and allow it to come back on the system when it is safe to do so.
EXISITNG COORDINATION
Where existing examples of coordination were identified, these broadly fell into two categories:
- Restrictions on the participation of ANM generators or non-curtailable generators in an ANM area in Balancing Services markets; and
- Coordination between network companies
A number of examples of restrictions on ANM generators participating in Balancing Services markets were identified. A key example was frequency response services. In a previous (2016) invitation to tender for Enhanced Frequency Response12 (EFR), it was clearly stated that to participate, “assets must not be in an existing area of Active Network Management”. This creates some ambiguity, specifically regarding whether it applies to non-curtailable generators in an ANM area, or just ANM generation. Engagement with DNOs revealed that non-curtailable generation in an ANM area will not always be aware that an ANM system is in place. In many cases it is likely that generators will be aware of the ANM scheme as the DNOs typically undertake proactive stakeholder engagement, but there is no formal requirement for those generators to be informed. Hence any restriction that excludes generators in an ANM area may not have the desired effect under current arrangements as the generator would not always be aware that it is excluded.
Coordination between DNOs and NG ESO was investigated through the stakeholder engagement work, which revealed limited interaction between parties on existing schemes. However, communication links (in the form of ICCP links) are being put in place as part of the Regional Development Plans (RDPs).
WS2 sought to define test cases against which to find solutions, based on the risks identified in WS1 of ANM schemes that were not coordinated with Balancing Services.
Identified Test Cases were split into three categories:
- Test Case 1: counteraction of Balancing Services by ANM systems.
- Test Case 2: ANM systems counteract Balancing Services provided by DNOs using the CLASS system.
- Test Case 3: Non-delivery of non-participation by ANM generators in Balancing Services due to ANM risks.
WS3’s aim was to set out solutions that would d be assessed further, based on the Test Cases set out in WS2.The identified solutions broadly fall into four categories:
- Reconfiguration of ANM schemes (solutions W1-W3)
These solutions focus on modifying the design, where necessary, of existing and new ANM schemes to either allow for NG ESO instructions to the ANM scheme, or alignment of ANM curtailment timescales with Balancing Services timescales.
- Improved information exchanges and coordination (solution X1)
This focuses on improving communication between ANM schemes and ANM generators, allowing generators to take informed decisions which avoid the issues identified in the Test Cases.
- Changes to market rules (solutions Y1 and Y2)
These solutions look to market-based remedies, either by accounting for non-delivery risk due to ANM in the processes used for procurement of Balancing Services, or broader changes to implement a market-based framework for allocating network capacity.
- Coordination with CLASS systems (solutions Z1 and Z2)
These solutions focus on aligning information between ANM and CLASS schemes, coordination of actions to avoid conflicts and apportioning compensation where necessary.
WS5 considered three solutions: W1,X1 and Y1, to assess the barriers to implementation, actions required to overcome these barriers and set out a proposed implementation plan. The solutions related to CLASS (Z1 and Z2) were not considered further, due to the limited benefits case from WS4 and limited relevance of CLASS to wider industry, with only one DNO adopting the technology to date.
More details on the barriers, actions and implementation plan are covered in the Planned implementation section below.
WS6 delivered on disseminating the learnings from the project to the wider industry through a webinar hosted on 2nd June 2021.
Lessons Learnt
Interim project outcomes
From the 5 shortlisted solutions (W1, X1, Y1, Z1 and Z2), only three (W1,X1 and Y1) were considered to be taken forward into implementation. Z1 and Z2 were not considered, due to limited benefit case from WS4 and the limited relevance of CLASS to wider industry.
For the three identified solutions to be implemented, an assessment framework, made up of six broad areas (Technological, Regulatory, Commercial, Financial, Organizational and Process related) was used to identify barriers and corresponding actions to overcome the barriers.
Below are the identified barriers and actions required for each of the solutions that will need to be addressed by different parties, for these solutions to be implemented as BaU:
- A major change needed for solution W1 (parallel decrementing instruction) is secure communications infrastructure (where not already in place) between NG ESO and DNOs. There are also a number of regulatory and commercial reforms. The required actions for implementation would include:
- Establishment of communication links consistently across GB with sufficient security (particularly if NG ESO interfaces directly with ANM controls), plus the associated investment and organisational changes required to accommodate communications.
- Regulatory changes to allow and ensure compliance with NG ESO instructions to ANM systems.
- Possible amendments to DNO forecasting of curtailment risk, and reflection of this in connection agreements.
- Adaption of existing ANM systems if necessary to create functionality for holding headroom
- One of the major changes required under solution X1 is detailed forecast information from DNOs to individual generators to enable them to make more informed commercial decisions regarding their participation in Balancing Services. From stakeholder engagement work, it is understood that this represents a significant change in existing DNO forecasting capabilities and will require industry participation to understand the limits of such forecasts. Key required actions for implementation would include:
- Communication links between DNOs and generators to allow for the provision offorecasting information, with appropriate security.
- Likely significant development of curtailment forecasting capabilities by DNOs.
- Regulatory changes to cover the frequency and quality of DNO forecasts, and risk tolerances around these.
- Process changes for generators to take account of DNO curtailment forecasts in commercial decisions.
3. The most significant change for solution Y1 is the creation of a risk-based framework, under which NG ESO would evaluate submissions made by generators to account for the potential risk of curtailment. This represents a fundamental change to the existing procurement of Balancing Services, and alongside technological considerations to ensure communications can take place, there are significant regulatory and commercial barriers to overcome. These include:
- As for solution W1, direct communication between NG ESO and DNO control rooms to provide information on ANM curtailment, with appropriate security in place.
- As for solution X1, DNO forecasting of curtailment risk to provide information to NG ESO, alongside ex-post identification of generators defaulting on Balancing Services due to network constraints. This is a significant organisational challenge to DNOs.
- The development of a risk-based framework by NG ESO – a fundamental change to existing arrangements – and the management of risk by NG ESO on behalf of consumers that was previously borne by generators. This represents a significant organisational challenge.
- Commercial risks around the process of NG ESO pricing in risk not being sufficiently transparent for industry participants, or treating generators fairly.
Dissemination
A dissemination webinar to present the learnings of the project to a wider industry audience took place on the 2nd June 2021.A link to the recording of the session and copies of the slide pack presented has been shared with all who registered for the webinar.
