The National Grid claims it has hit its demand side response targets two years ahead of schedule, with plans to open the ‘ultimate flexibility market’.
According to the National Grid, over 50% of balancing services were provided by demand-side response during May this year. The National Grid set itself the target of obtaining 30-50% of balancing supply from demand side response sources by 2020 and if these levels continue the system operator would have surpassed its targets two years early.
The next step for the Grid would be to expand the balancing mechanism in order to include more flexible sources, while also connecting the UK with other European markets.
Head of Commercial Electricity at the National Grid, Cathy McClay claimed that balancing mechanism would be the “the ultimate flexibility market”.
The requirements of the mechanism are predicted to double by 2022 which could create a development fund of over £500m for providers of flexible response sources. Plans are also being developed to open up the mechanism to include independent providers, as well as Transmission Connected Generators and licenced suppliers later next year.
Meanwhile, the National Grid’s balancing and settlement code manager, Chris Fox stated that the UK will be looking to improve access between the Grid and the Trans-European Replacement Reserve Exchange (Terre).
‘Project Terre’ is an attempt to form a collaboration between the National Grid and system operators from other countries to create a joint European balancing market.
If the scheme is to go ahead, Terre requires that each market participant has exactly the same access and the project has been given an optimistic ‘go live date’ of 2019. Experts remain sceptical in regards to this proposed live date as the Balancing Market uses a ‘pay as bid’ trading strategy, while Terre uses a contrasting ‘pay as cleared’ system which would prove to be unviable unless an agreement can be reached.