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Reference Number NIA2_NGESO008
Title Reactive Power Market Design
Status Completed
Energy Categories OTHER POWER and STORAGE TECHNOLOGIES (Electricity transmission and distribution) 50%;
OTHER CROSS-CUTTING TECHNOLOGIES or RESEARCH (Energy system analysis) 50%;
Research Types Applied Research and Development 100%
Science and Technology Fields ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering) 100%
UKERC Cross Cutting Characterisation Not Cross-cutting 30%;
Systems Analysis related to energy R&D 70%;
Principal Investigator Project Contact
No email address given
National Grid ESO
Award Type Network Innovation Allowance
Funding Source Ofgem
Start Date 01 September 2021
End Date 31 July 2022
Duration ENA months
Total Grant Value £600,000
Industrial Sectors Power
Region London
Programme Network Innovation Allowance
 
Investigators Principal Investigator Project Contact , National Grid ESO (100.000%)
  Industrial Collaborator Project Contact , National Grid plc (0.000%)
Web Site https://smarter.energynetworks.org/projects/NIA2_NGESO008
Objectives The project will run a number of work streams exploring the elements of a future reactive market design. Work stream 1, the project will run a technical modelling exercise to define system needs and develop a methodology to identify the reactive market procurement requirements.In parallel, work stream 2 will run an in-depth market analysis, exploring the blockers and enablers for reactive power market participation. Identifying a long list of potential market participants including traditional generators, DER, renewable generators, interconnectors and network assets. This workstream will also look to identify potential MVAr capability of these identified providers to participate in a market will be assessed both via exploring our existing data on reactive capability for providers who already provide some reactive power to the ESO as well as a series of stakeholder and market engagement activities (like forums with relevant associations, 121 interviews, etc.). This information will enable the project team to assess the levels of competition we might expect within a reactive power market in different locations. This will support the final feasibility study and recommendations for next steps.These work streams will feed into a range of reactive market designs elements (i.e. building blocks). As part of a co-creation process, these building blocks will be chosen to form a range of potential market designs. ESO will collaborate with Afry and the industry, using a “strawman” approach, to develop these detailed end-to-end designs. Once several design options have been constructed, the project will test with market participants via the industry participated workshops. A commercial analysis will be run at this stage to make sure the final solution aligns with project objectives and success criteria.Finally, a feasibility study will be run through an economic modelling assessment based on the outputs from above to simulate the market procurement. This will facilitate estimation of how much will be spent with the proposed market design arrangement until 2025, and to evaluate the feasibility of the options. The proposed reactive power market is aiming to procure services to meet SQSS compliance including the steady state voltage requirements and to ensure that voltage step changes can be managed within limits. ​ This project will include: ​Technical analysis which will define service need and design a consistent, repeatable, and extendable methodology to set up the procurement requirement.Market analysis to explore potential market size and recommend markets routes for different types of providersCommercial analysis to design procurement strategy including frequency of procurement, assessment rules, and price setting methodology, etc.​Feasibility modelling and assessment based on the above analysis output to recommend the most suitable market design and next steps (trial, implement or not continue, etc.) ​ The project will design a reactive power market and analyse whether it will be a feasible option that can be developed to meet the following goals:Access more reactive power (MVAr) in the right locations to maintain system voltage securityIncentivise more cost-effective solutionsDrive down the overall reactive cost to maximise consumer benefitsDevelop routes to procure reactive power from more participants to stimulate greater competition
Abstract Reactive Power is an essential service used by NGESO to control the system voltage level within the limits that are defined in the Grid Code and NETS SQSS. Conventional transmission connected sources of reactive power are being replaced by renewable and decentralised units. This change to the generation base, along with a changing demand profile, makes controlling voltage on the NETS more challenging.The project is to explore if a reactive power market could be developed to help ESO access more reactive power in the right location, create market access for more providers, incentivise more efficient new technologies and lower the overall spend on reactive power control. This will facilitate ESOs goals to deliver Competition Everywhere, Zero-Carbon System Operation, and Whole Systems Outcomes by 2025.
Publications (none)
Final Report (none)
Added to Database 19/10/22