This session helps you understand the direction the market is taking and how you should plan your future battery policy.
Batteries are the hot topic of the moment, but so far few are being installed and commissioned at scale across the sector. This is not only a technology issue but a finance problem as at present it is often difficult to make the financial case. This session will not only focus on how battery technology is developing but also on how changes in the electricity codes could increase the income generated by batteries.
Batteries installed in medium to large sites across the country could be used to balance the local and national grid. The use of batteries to reduce demand at peak has a value that through the balancing mechanism unit (BMU) can be paid to those operating batteries. This new income stream will change the way you use, own and contract batteries.
1. Dr Timothy Hughes, Global Principal Scientist: Batteries, Siemens plc
John Lucas, Market Architect Team Leader, ELEXON ltd
Lord Rupert Redesdale, CEO, Energy Managers Association
The Battery Storage Revolution
Panellists:
Panel Chair:
2. Decentralised Energy Trading Association (DETA)
DETA is a non for profit limited by
guarantee solely funded by membership
DETA will:
• Represent and become the voice of the
battery storage industry including,
manufacturers, suppliers, financiers,
developers and consultants
• Develop legislative, regulatory and
commercial landscape
• Reduce supply by managing demand
www.deta.org.uk
vassia@deta.org.uk
4. 4
The Storage Revolution1
Decarbonisation needs a big
growth in electricity storage
6 GW by mid-2020s
13-28 GW by 2050
Many of the actions in the Smart System and
Flexibility Plan relate to Storage
ELEXON is working hard to remove
barriers …
Supporting the transition to DSO
flexibility markets
Removing ‘double charging’ of
Final Consumption Levies (FCLs)
Opening the Balancing Mechanism
to Storage
(1.1a) Storage not overcharged for use of distribution,
transmission and balancing system
In Progress
(1.1b) More clarity on the treatment of storage as intermittent
or non-intermittent in the distribution charging methodologies
Completed
(1.9a) Cost reductions for storage innovation competition
launched – grants awarded
Completed
(1.5) Design of renewable schemes will realise benefits of
storage for self-consumption and export to the grid at peak
times
In Progress
(1.2) Regulatory regime for electricity storage clarified
In Progress
5. Balancing Mechanism and Balancing Services
The Balancing Mechanism (BM) Why hasn’t the BM attracted smaller players?
2
Introduced in 2001 as part of GB’s New
Electricity Trading Arrangements (NETA)
It was intended to be open to:
• Generators of all sizes
• Demand side response (DSR)
In practice, takeup has been higher from
large generators
Ancillary Services
• The failure of the BM to attract smaller
players has contributed to a proliferation of
other balancing services, procured by
National Grid:
Short Term Operating Reserve (STOR)
Demand Turn Up
• Market design geared towards plant with
its own network connection, capable of
following detailed minute-by-minute
instructions
• DSR participation can only be facilitated
by the customer’s electricity supplier –
not specialist independent aggregators
• Complexity of industry codes
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6. 6
33 Additional revenue streams through balancing services (TERRE, MARI)
NowFuture Balancing Mechanism (BM)
Bid Offer Acceptances are issued through BM that
(not open to independent aggregators)
Non-BM ancillary
service contracts
Standard EU-wide products Country specific products
Replacement
reserve standard
product
(open to independent
aggregators)
mFRR standard
product
(open to independent
aggregators)
Reformed BM
(open to independent
aggregators)
Non-BM ancillary
services contracts
(open to independent
aggregators)
2
Further changes to support
DSR
More flexibility on where settlement metering is located; use of a baselining
methodology for Demand Side Response
1
EU-led changes in progress
(P344 Project TERRE)
To allow smaller generators and aggregators to offer energy to the System
Operator for use through standard EU-wide products and Balancing
Mechanism
3
Electricity Market Sandbox
(P362)
To introduce a mechanism to grant temporary exemptions from BSC
obligations to trial new solutions and innovative ideas
7. 7
Behind the meter resources: new aggregators for new resources4
ELEXON has already embarked on a programme to re-architect our central systems, to deliver a scalable, flexible and efficient
platform to provide settlement and other value-added services to the market
1
2
3
4
5
Data available for analysis
(open data principle)
Scalable and flexible
solution for future changes
Faster, automated
processes
Opportunity to use
emerging technologies
(Blockchaing, AI, IoT..)
Secure by design
1
2
3
4
5
Improved customer
experience
Faster, digital
registration
Unified customer portal
Real-time analytics and
insight
Easy integration with other data
sources through APIs
Benefits to existing and new market
participants
Benefits to central services utilised by
all market participants
There needs to be a flexible and open central IT platform to enable innovation at the consumer-facing end of the market
8. 8
Final Consumption Levies5
OFGEM’s Smart
System and
Flexibility Plan
(Action 1.3)
Final Consumption Levies (FCLs) are
not payable on electricity provided to
Generation Licence holders
In Progress
Getting this right will remove
barriers to storage accessing
certain revenue streams (e.g.
arbitrage)
1
For the Renewables Obligation (RO), Suppliers should adjust their submissions
accordingly
2
For the Contracts for Difference (CfD) Levy, volumes are calculated centrally, so
we are adjusting central BSC processes
3
We are delivering an interim solution in January 2019, but it won’t handle ‘behind
the meter’ assets
4 Enduring solution will follow on – probably 2020
9. 66 DNO-DSO transition: standardisation or a multitude of diverse solutions
Looking beyond the Balancing Mechanism, local flexibility markets to be managed
by Distribution System Operators (DSOs) represent a big new market.
In GB, the transition from Distribution Network Operator
(DNO) to DSO is being coordinated through the Energy
Network Association’s Open Network Project.
1
It is important to aim for simple and un-
fragmented arrangements, allowing
customers easy access to multiple markets.
ELEXON’s View
2
There is benefit in harmonising and
consolidating where capabilities already exist
in the market.
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10. Balancing & Settlement
ELEXON – www.elexon.co.uk
Electricity market Reform Settlement
EMRS - www.emrsettlement.co.uk
Balancing Mechanism Reporting Service (BMRS)
www.bmreports.com
Further information
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Questions:
John Lucas
Senior Market Architect
john.lucas@elexon.co.uk
Market Entry
market.entry@elexon.co.uk
ELEXON provides key energy market infrastructure
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