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Projects: Projects for Investigator
Reference Number	NIA2_NGESO015
Title	FIC (Future of Interconnectors)
Status	Completed
Energy Categories	Other Cross-Cutting Technologies or Research(Energy system analysis) 90%; Other Power and Storage Technologies(Electricity transmission and distribution) 10%;
Research Types	Applied Research and Development 100%
Science and Technology Fields	ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering) 100%
UKERC Cross Cutting Characterisation	Systems Analysis related to energy R&D (Energy modelling) 100%
Principal Investigator	Project Contact No email address given National Grid ESO
Award Type	Network Innovation Allowance
Funding Source	Ofgem
Start Date	01 July 2022
End Date	31 July 2023
Duration	ENA months
Total Grant Value	£400,000
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_NGESO015
Objectives	Detailed modelling will be undertaken based on the ESOs Future Energy Scenarios (FES) 2022 scenarios, focusing on the 2025-2035 timeframe. These scenarios outline four potential pathways to 2050, with different assumptions in terms of energy supply and demand, reflecting the unpredictability of the energy transition. Although there is no certainty that the evolution of the energy system will follow any of these specific trajectories, they provide a robust and industry wide accepted baseline to investigate the future.Modelling work will be complemented by extensive research activities, qualitative insights from relevant market experts, an analysis of other markets, the review of operational data, and stakeholder engagement within the ESO and externally.These analysis and research activities will be divided in three phases:Phase 1 will set the scene and, through modelling, provide an understanding of the energy mix attributes of each of the selected FES scenarios up to 2035. The intention of the modelling work undertaken in this phase will be to explore the issues that the system may present: how much frequency/response support will be needed in the future? What resources will be available to provide it? How much interconnector volume will be redispatched to ensure reliable flows across boundaries on the transmission grid? Weather pattern selection will be a key part of this phase, and this information will be used in the next phase to obtain insights on how extreme weather might impact the interconnectors behaviour and exacerbate or relieve flexibility, adequacy or operability problems in GB.Phase 2 will define the future role of interconnectors in supporting adequacy, flexibility and operability requirements for each scenario analysed in Phase 1. This will be done through a deeper interrogation of modelling data and through engagement of industry experts. Some sensitivities will be looked into as part of this phase, seeking to address specific questions about the future role of interconnectors. These include:Locational wholesale market: this analysis will look into how zonal and nodal market arrangements would impact on interconnectors. This will be done by splitting GB into zones and comparing the behaviour of interconnectors relative to current market arrangements. The impact of different landing points, one side and the other of boundary constraints, will also provide insights into how constraint costs might be reduced by introducing zonal or nodal pricing versus the current market design. In parallel, research will be conducted to understand how zonal and nodal pricing could impact the interconnectors business models and their participation in ancillary services and the capacity market.Multi-Purpose Interconnectors (MPIs): MPIs will be modelled as an interconnector with an offshore wind farm directly connected to it. This analysis will identify the differences between MPIs and interconnectors in the areas of adequacy, flexibility and operability. The specificities and implications of “offshore bidding zone” and “home market” arrangements will also be explored.Ancillary services: interconnectors will be included in explicit reserve/response products, providing information on the opportunity cost for interconnectors of providing these services. Phase 3 will then identify, develop and assess options for how the ESO and industry could maximise the potential of interconnectors for the net zero GB system. This phase will be supported by engagement with experts from ESO and the wider industry. The scope of each phase of the project is clearly defined with specific deliverables and questions requiring an answer:Phase 1 – Status quo and future net zero landscapeThe market modelling and analysis conducted in this phase will aim at:Understanding current interconnector operational behaviour and business modelsGathering insights into the energy system of each of the selected future energy scenarios and target years, in Britain and its neighbouring countries (e.g. supply and demand mix and patterns, flows and trends)Identifying which technologies and service providers will be available to meet the future needs of the system in the areas of flexibility, capacity adequacy and operability (e.g. how much capacity will be available to provide adequacy, other than the capacity provided by interconnectors? And from which sources?)Phase 2 – Role of interconnectors in the net zero systemThrough a deeper interrogation of the modelling data and expert engagement, this phase will provide a quantitative and qualitative assessment of the risks, opportunities, blockers and enablers related to interconnectors in the future energy scenarios analysed. Some of the questions that this phase will look into are:How could interconnectors provide support to the net zero system in terms of flexibility/capacity adequacy/operability? What potential barriers are there to this?What are the challenges brought by interconnectors in each of these areas? How can these be mitigated?Taking into consideration the needs of the system, what role should interconnectors take in flexibility/capacity adequacy/operability support?What will their impact be on carbon emissions?How would interconnector behaviour change if the GB wholesale market was reformed to include more locational pricing?How do we expect MPIs will behave relative to traditional interconnectors?Phase 3 – Role of the ESOBuilding on the conclusions delivered in Phase 2, this phase will identify a long-list of possible tools, levers or mechanisms that ESO and the wider industry could consider to lead to interconnectors benefitting the GB system more optimally. Identification of items on the long-list will not be constrained by existing commercial and regulatory frameworks or by existing organisational or institutional structures.Because the project will model and analyse four different future energy pathways, we expect the results and findings to diverge between scenarios. There is even a risk that contradictory conclusions are reached between one scenario and another. Having visibility of this divergence will be essential in the development of recommendations. The main objectives of this work will be to:Provide a clear insight into how interconnectors currently operate and behave in GBs energy system, establishing a baseline as a reference point for future looking analysis.Examine the physical characteristics of GB and its neighbouring markets under selected Future Energy Scenarios (FES) cases for 2025, 2030 and 2035, investigating the requirement for and resource availability to provide flexibility, operability and adequacy needs.Assess the potential role of interconnectors, and the opportunities and challenges they can offer, in a GB net zero system.Analyse how interconnector behaviour might change under different circumstances such as the introduction of locational pricing in GB or the development of MPI models.Identify potential barriers to and risks of provision of system services by interconnectors in a net zero system.Identify a long-list of possible tools, levers or mechanisms that ESO and the wider industry could consider to lead to interconnectors benefitting the GB system more optimally
Abstract	By 2035, GB interconnector capacity is forecast to grow from ~8 GW today to 16 - 27 GW.The net zero GB electricity system will be characterised by prolonged periods of excess or deficits of renewable electricity. Operability and capacity adequacy will be very different challenges as firm fossil plant retires and the system becomes less stableInterconnectors have the potential to support these challenges, but the technical and commercial solutions are unclear. This project will undertake research and modelling of different net zero scenarios to investigate the role that interconnectors could play in the net zero electricity system.The ESO proposes that nodal pricing should be introduced to the wholesale market. The impact of this on the operation of interconnectors needs to be understood.
Publications	(none)
Final Report	(none)
Added to Database	14/10/22