Ensuring fair market access for distributed energy resources
For the UK to successfully meet its target to bring all greenhouse gas emissions to net zero by 2050, many barriers will need to be overcome. One such hurdle is existing legislation, which is running to keep up with the pace of change and new technological innovations.
The problem is that most legislation was introduced when the energy landscape was a very different place. It was designed with large scale generators in mind, rather than the small, high volumes of devices which are starting to enter the market today.
But to capitalise on the many opportunities that renewable technologies present – and recognising the central role that battery storage must play if the country is to achieve its carbon neutral ambitions – legislation needs to catch up. Importantly, it needs to ensure there is a level playing field.
Steps are being taken in this area and at Upside Energy we’re delighted to be involved in a project that is looking at ways to improve existing rules and processes, in respect of residential demand response.
One of the opportunities we have to support the grid in managing the intermittent nature of renewable generation, is to utilise battery storage, for example those found within the UK’s growing fleet of electric vehicles.
The Upside Platform was designed to enable a route to market for exactly these types of distributed energy resources, and we are working alongside manufacturers, owners and developers, as well as power traders, utilities and system operators, to enable aggregated blocks of these distributed resources to bid in the various markets.
National Grid uses these balancing services to help match electricity supply and demand. However, adding residential demand response programmes into the mix to support the net-zero target, faces some key challenges. One of which is the current requirement for individual assets to be tested and certified.
In the case of large sites, these rules don’t present too much of an issue, however for high volumes of smaller devices, it can be highly onerous and restrictive. Plus, it is impractical for National Grid to then manage the large volume of data involved.
What we at Upside are doing – along with Kaluza (Ovo Energy), Moixa, Lightsource and Element Energy – is taking part in a National Innovation Allowance project with National Grid, to explore options that would allow domestic access to demand response programmes.
These options include looking at how the commissioning process can be streamlined for similar sites and devices, understanding how the frequency meter requirements can be updated to reflect the high volumes of devices, and how large portfolios of devices can be effectively managed to meet National Grid requirements.
By scoping out new ways of testing and managing large portfolios of residential DSR assets, we hope to lower prohibitive costs, while still ensuring reliable performance for the Electricity System Operator (ESO).
If we can update current frameworks so they are no longer a barrier to entry, by transforming prequalification, testing, performance monitoring and the management of large numbers of residential DSR assets, then this could help unlock the huge flexibility potential of electric vehicle smart charging and V2G – which are already rising in numbers and set to grow exponentially in the coming years.
Such changes could open up the market, supporting fair access for distributed energy resources to the balancing mechanism and ancillary services markets, while overall helping the UK move one step closer to its carbon reduction commitments.
Devrim Celal, Upside Energy CEO