Accessing Value in Future Energy Systems. Market Design facilitating local markets Robyn March 2018

Transcription

1 Accessing Value in Future Energy Systems Market Design facilitating local markets Robyn March 2018

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4 The future of the electricity system: flexibility is key What impact will massive transformation of electricity system have on flexibility requirements? Characterising wind lulls: hours, days, weeks? Dealing with excess power on the grid: summer midday? Solar drop off ramp rates & impact on inertia? How much nuclear power will get built? How will interconnectors behave? What role will batteries perform? How much demand annihilation will there be due to efficiencies & declining industries? What kind of demand increase from EVs, electrification of heat, bitcoin mining? How will balancing market reform, changing network costs, de-rating factors affect viability of flexibility in the short-term? 4

5 Transforming Markets Reforming, refining, redistributing roles & remittance Wholesale markets Greater volatility short-term vs long-term Market must manage renewable intermittency New Imbalance calculation (PAR1) coming Q Growing need for traders to shift electricity intra-day Local Energy Markets Emerging local markets; e.g. Open Utility Transition from DNO to DSO Greater ability to forecast and manage distributed energy assets e.g. Solar PV generation How can value be accessed using flexibility? 5

6 Advanced energy tech is providing invisible, real-time demand flexibility when and where it is needed 6

7 Behind-the-meter flexibility: Batteries & Demand Side Response Around 1GW of battery built or under construction capacity in UK National Grid s dynamic frequency response requirements are 600MW Irrational overbuild FFR (dynamic) prices have plummeted The business case is increasingly challenging: changing network charging strategies market uncertainty Careful battery management crucial to successful operation Customer: Camborne Energy Storage 7

8 Behind-the-meter flexibility: Batteries & Demand Side Response Shifting BTM electricity consumption using DSR or batteries aids scheduling to make best use of on-site assets Each I&C site has individual characteristics: Technology Operations On site generation Import/export limits Weather dependencies Value in daily bespoke optimisation Majority of information known 24 hours in advance Real-time signals (e.g. system imbalance prices) present an additional revenue stream Value shifting to local signals e.g. site import/export constraint management, rather than DUOs, TRIAD avoidance Market design must be technology agnostic Customer: Severn Trent 8

9 Site Constraint Management: highly local kw Standing charge /kva/day for import and export: understand site and flatten out demand to reduce connection capacity? Consumption Profile Control demand to prevent exceeding site limits 0 12:00 AM 3:00 AM 6:00 AM 9:00 AM 12:00 PM 3:00 PM 6:00 PM 9:00 PM Site Demand Export Limit Import Limit 9

10 Innovate UK project Short-term forecasting of solar generation Increasing levels of solar PV impacting the LV network (e.g. Cornwall) Innovate UK funded research project to better predict and manage the performance of solar PV on the LV network: Meniscus Systems Open Energi Cornwall Council The BRE National Solar Centre Aims to pave the way for smarter use of solar PV via peer-to-peer energy markets that benefit local communities The project will use: Satellite based imagery to predict solar intensity for any location at intervals of 5 minutes on an hour ahead basis PV data from a Cornwall Council site to test and demonstrate the system and explore the role of on-site battery storage Open Energi s expertise to deliver accurate, real-time PV-based DSR solutions to DNOs and solar farm owner/operators Customer: Sainsbury s

11 Conclusions Increased renewable penetrations are driving greater flexibility requirements Falling inertia means fast acting frequency response Wind forecasts accurate so not increasing demand for reserve Increasing wholesale volatility (particularly Day Ahead auction) Batteries New source of (surplus) flexibility Low OPEX so difficult to extract value from frequency response markets Bespoke optimisation needed for site management and trading Rising demand for battery management services Site optimisation/production scheduling Peak price incentive disappearing and likely being replaced with stronger capacity standing charges Instead of global solutions (e.g. Triads) there will be highly localised ones (e.g. bespoke site management) Trading Traders will experience the challenge of intermittent renewables more than National Grid Building tools to enable traders to dispatch flexibility will be of great value Electric Vehicles are coming Project TERRE 11

12 What barriers exist to distributed energy assets participating in local energy markets?

13 Conclusions Site optimisation/production scheduling Peak price incentive disappearing and likely being replaced with stronger capacity standing charges Instead of global solutions (e.g. Triads) there will be highly localised ones (e.g. bespoke site management) 13

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