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FLEXIBILITY GOES UNDER THE HAMMER

FlexibilityIn UK-first move for a DNO, Northern Powergrid announces intent to procure local flexibility via e-auction

Northern Powergrid is looking to procure flexibility for network resilience via a Dynamic Purchasing System and e-auction, the electricity distribution business for North East, Yorkshire and northern Lincolnshire revealed today. 

In a first-ever move for a UK Distribution Network Operator (DNO), the company will conclude each competition with a reverse Dutch e-auction* to procure flexibility from customer-led assets across its patch to support network resilience activity across its power distribution system at the best possible price for its 8 million customers. 

The scheme, named Restore Flexibility, will help the operator manage the network on the rare occasions when it experiences network faults. Where it experiences such issues, customers may be able to support the system through providing flexibility – by shifting their energy consumption temporarily or flexing their generation assets after receiving an instruction from the DNO – and in return the customer would get paid a price/MWh, as set in the e-auction process. 

Andrew McKenna, Commercial Development Manager at Northern Powergrid, said: “On the occasion where utilising customer flexibility is inherently cheaper than the counter factual action, we will look to take this action meaning that not only do customers with assets benefit from a new revenue stream, but every single customer benefits financially from the DNO achieving the same outcome through a more cost effective method. 

Jim Cardwell, Head of Policy Development at Northern Powergrid, added: “With increasing numbers of councils across our patch declaring a climate emergency, we are eager to build a system that can support a fully decarbonised power sector while ensuring we provide the best possible service at the best possible price for every single member of our community. Actions like flexibility procurement for network resilience are crucial to this and empower our customers to play a more active role in network management.”  

The exercise will see firms across seven key locations in the region bid to be in a position to provide flexibility, with the aim of procuring up to 100MW of capacity across these locations. The locations are: St Andrews Road (Huddersfield), Staygate (West Yorkshire), Wold Newton (East Yorkshire), Featherstone (West Yorkshire), Greatham (County Durham), Denwick (Northumberland) and Guisborough (North Yorkshire). 

By opening the following link for Northern Powergrid’s e-Tendering portal, and selecting ‘opportunities’, prospective providers can register to participate in the Dynamic Purchasing System – https://berkshirehathawayenergy-npg.app.jaggaer.com/esop/upv-host/public/berkshirehathawayenergy/npg/login.jst 

Northern Powergrid is especially interested to hear from:

•    major energy users (such as factories or supermarkets that can engage in demand side response),
•    power generators (minimum 100kW),
•    aggregators of smaller assets, and 
•    storage operators 

The network operator is keen for those with assets in the named locations to register. When a final contract has been awarded, the successful bidders will enter a pool of assets that can be instructed to turn up (generators) or down (demand side response) to support a stable power supply in the region. 

The procurement approach is announced shortly after Northern Powergrid launched its updated approach to future network management in its Distribution System Operator (DSO) v1.1 document. The document highlighted that regional electricity generation capacity in Yorkshire and the North East quadrupled in the last 10 years, reaching more than 4GW – a figure more than Hinkley Point C’s intended capacity of 3.3GW, and almost four times the 1.2GW capacity of world’s largest offshore wind farm, Hornsea One. These figures further demonstrate the rapidly growing number of generation assets on Northern Powergrid’s network and highlight the growing opportunities for schemes such as Restore Flexibility.