There are limitations to the existing system which manages Flexible Distributed Generation (FDG) connections, which in turn limits the ability of connected Distributed Energy Resources (DER) to support the GB energy system. The system issues are as follows:

1.       Current system is based on a last in first out (LIFO) system. It does not consider the distance of a customer from the  nearest substation, which in some cases leads to higher overall DG curtailment.
2.       Existing FDG only applies to generation. It does not enable other types of DER to connect flexibly.
3.       Some FDG customers would be interested in participating in National Grid balancing services. However, if a generator was curtailed when called on to provide a balancing service, there would be a financial penalty imposed on them. We understand from our customers that the risk of penalties outweighs the benefit of participating in the market, which limits their ability to maximise income from their assets.  

We anticipate a second influx of additional DG across GB networks sometime in the future. As it takes time to reinforce the network, it would be advantageous to identify where it is appropriate to maximise network capacity using market-based solutions. This will benefit customers and the network, and allow network-based solutions to be deployed quickly when and where they are needed. 

Ofgem have asked the ESO and network companies to “lead on reviewing incremental improvements to the allocation of access rights (eg better management of connection queues, allowing generation who have non-firm connections to trade with others to reduce the extent they are curtailed, enabling the exchange of access rights between users).”

Objectives

Key Objectives:
·   Better understand the feasibility of market-based curtailment management, and what is required to holistically deploy one. This may include recommendations for what regulatory incentives are required to make this viable.
·   Understand from historic FDG curtailment data what the potential benefits are of a MBCM.
·   Forecasting future levels of curtailment, given current levels of growth in rooftop solar and electric vehicles.
·   To design a system compatible with multiple technology and commercial solutions.
·   Quantify the financial value of market-based curtailment management for customers and the DSO.
·   Quantify impact the system will have on UK decarbonisation.
·   To simulate market-based curtailment management and, if successful, carry out a live trial.
·   Develeop learning on whether allowing generators who have non-firm connections to trade access rights with others will lead to holistic system benefit.
·   Use learnings from MBCM to develop a more sophisticated reinforecement trigger. This will signal when reinforcement is the least cost solution when taking into consideration the cost of curtailment. 

Desired Outcomes:
·   Progress towards a DSO – greater understanding of what will be required.
·   Enable better management of connection queues.
·   Improve the profitability and reduce curtailment for DER, especially low carbon technologies, on our network .
·   Facilitate the low carbon transition of the UK economy.