This project will demonstrate if flexible reactive power is possible, assess whether it is a solution to voltage problems, loss minimisation and thermal network constraints, and understand if participants are willing to provide reactive power as a service.
It will carry out engagement and literature review to document which technologies are able to provide reactive power flexibility and, undertake studies to demonstrate if optimised reactive power dispatch has the ability to defer network reinforcements and minimise losses. It will then carry out Cost Benefit Analysis to determine the financial and environmental costs/benefits achieved from the use of flexible reactive power, and carry out a market assessment to determine asset owners’ interest in providing flexible reactive power as a service, before developing an initial market design.
Benefits
The Q-Flex project has a strong benefits cased based on two main factors. The first links to the benefits of the reactive power flexibility market the project is looking to develop. This will provide licensees with a new method of meeting constraints and minimising losses whilst reducing the need for reinforcement. This will provide a cost saving to customers.
The second is the benefit to the general flexibility market in GB. As the project will be delivering a new form of flexibility market which makes use of assets already available on the distribution network, it will help create a more nascent and liquid flexibility market.
Learnings
Outcomes
Current & Emerging Technologies Reactive Power Capability
• Gathered literature on existing and emerging technologies' reactive capabilities/controllability, trial results, control systems, etc.
• Developed and issued questionnaires to asset owners/operators.
• Produced a Reactive Power Technology Catalogue.
Q-Flex Reactive Power Studies
• Identified constraint case studies using the Distribution Networks Options Assessment (DNOA) and Shaping Subtransmission Reports. These were modelled in PSS/E.
• Updated the optimisation algorithm developed in the Virtual STATCOM NIA project.
• Undertook Q-Flex reinforcement deferral studies for networks at voltage levels 33kV, 66kV and 132kV.
• Undertook Q-Flex loss minimisation studies.
• Undertook Q-Flex operational studies.
• Undertook Q-Flex sensitivity studies.
Q-Flex Cost Benefit Analysis
• Developed costs and benefits assumptions to feed into the Common Evaluation Methodology (CEM) tool developed by Baringa.
• Undertook cost-benefit analyses (CBAs) for flexible reactive power dispatch.
Reactive Power Flexibility Market Engagement & Development
• Assessed flexible reactive power market interest.
• Developed initial flexible reactive power market design.
Q-Flex Project Report
• Produced this report summarising the work done, learnings, conclusions, and recommendations for the project.
Lessons Learnt
WP1 - Current & Emerging Technologies Reactive Power Capability:
- The Reactive Power Technology Catalogue summarised the reactive power capabilities of different existing and emerging technologies connected to the network, the P-Q capability plots of the existing and emerging technologies and the common reactive power control methods of the existing and emerging technologies.
- The use of flexible reactive power dispatch could provide one means to operate the existing network more efficiently. However, new services and optimisation in this area are needed to release the capacity for accelerated LCT connections.
- Market engagement found that many potential Reactive Power Providers (RPPs), particularly solar PV and wind energy, could provide significant reactive power support with negligible opportunity costs when operating below full active power export during darker and less windy periods, respectively.
- With suitable control systems, modern grid-forming inverter-based Distributed Energy Resources (DERs) can vary their reactive power production, impacting voltage and reactive power flows at the point of common coupling. If this function is enabled, DERs can potentially act as sources and sinks of reactive power with significantly better variability than fixed capacitor banks or reactors at the distribution level.
WP2 - Q-Flex Reactive Power Studies:
- The optimisation algorithm from the Virtual STATCOM project was successfully updated to optimise power factor correction on voltages from 11kV to 132kV, with the primary goal of resolving network constraints and the secondary goal of reducing network losses.
- It may be possible to resolve network constraints and defer future network reinforcement in certain cases, with estimated reductions in thermal loadings of up to 5%. These represent up to 6 years of reinforcement deferral and apply at voltage levels from 33kV to 132kV.
- It may be possible to reduce the power losses of the electricity network, although this was more effective for the historical study than for the studies of future years based on the DFES.
- It was found that many generators were limited by a 3% rapid voltage change limit rather than a reactive power capability limit (the voltage step constraints are given in the Distribution Planning and Connection Code and Engineering Recommendation P28/2).
- Sensitivity studies showed the ability to resolve constraints and reduce network power losses to be highly dependent on nodal effectiveness, making certain generators strategic.
WP3 - Q-Flex Cost Benefit Analysis Studies:
- Cost-benefit analyses were successfully performed using the Common Evaluation Methodology (CEM) tool developed by Baringa to assess flexibility procurement. These produced Net Present Values (NPVs) for all study cases, and where these were positive, ceiling prices for availability payments where the cost would be equal to network reinforcement were calculated.
- There are significant estimated net financial benefits for deferring network reinforcement, varying with the CAPEX to be deferred, the timescale of deferral and the Weighted Average Cost of Capital (WACC).
- There were no estimated net financial benefits for minimising losses in the network unless these were coupled with the deferment of network reinforcement.
- Ensuring reactive power procurement is beneficial for us and our customers depends on the required volumes of reactive power, which depends on the network topology and the cost of deferrable network reinforcements. However, the most important factor is the presence of suitable and willing potential RPPs in the relevant Constraint Management Zone to provide reactive power support, which may depend on their market-entry upfront and opportunity costs.
WP4 - Reactive Power Flexibility Market Engagement & Development:
- Potential RPPs interviewed as part of NERA's stakeholder engagement process generally expressed a preference for alignment between the reactive power market and existing active power flexibility markets.
- Potential providers have differing needs for revenue certainty depending on their technology type; in particular, older windfarms and solar plants may require upfront investment to enable reactive power capabilities.
- Since suppliers will initially likely be monopolists over demand for their reactive power, a pay-as-bid market design has been developed initially. This allows NGED to compare bids against the cost of network reinforcement at the Service Requirement stage. Moreover, the prices RPPs can submit at the Availability Market stage are capped at the prices submitted in the Service Requirement stage.
- We may wish to transition to a pay-as-clear market design in the future if the interchangeability of supply arises in the reactive power market, as defined by an N-2 Liquidity Test for each Constraint Management Zone.
