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NETWORK / 10 / NOVEMBER 2017 O ver the summer National Grid took a major step to- wards the creation of a smarter, more flexible power system when it laid out plans to overhaul the way it buys balancing and ancillary services in its System Needs and Product Strategy (SNAPS) consultation. The firm said there are cur - rently too many products - many of them overlapping - with opaque interactions, require- ments and assessment criteria. Through a three-step process of rationalisation, standardi- sation and improvement, the system operator is hoping to create a more transparent and competitive market – one better prepared to meet the future needs of the power system. Of greatest interest to storage developers will be National Grid's plans to revamp to the procurement of frequency response – the service used to maintain grid frequency at a sta - ble 50 hertz. The trial tender for Enhanced Frequency Response (EFR) in 2016 was dominated by battery projects and set the stage for their breakthrough in the latest capacity market auction. National Grid intends to replace its multiple frequency response products - which also include Mandatory Frequency Response procured from balanc - ing mechanism participants and three different types of Firm Fre- quency Response tender - with a new unified service from 2018. "This should ensure access to the faster-acting response that is needed and increase transparency of how this is valued against existing response provision," the consultation document states. "The develop - FREQUENCY RESPONSE ment of this will also allow us to explore closer to real time procurement of the flexibility that is needed." The reception from the storage sector has largely been positive. "We agree that the cur- rent range of balancing products is confusing and that legacy products need to be removed," says Origami Energy commer - cial analyst for storage Rory McCarthy. "Fast response with sus- tained, accurately controlled delivery needs to be rewarded in the market," he adds. McCarthy also welcomes the potential for real-time procure - ment, saying he is "pleased that National Grid are considering this going forwards." But he also worries that the current approach will resolve "some, but crucially, not all the issues that exist in the market today. We understand that National Grid did not adopt a 'blank sheet of paper' approach and in doing so may have missed an opportunity to lay the foundations for fundamental market reform." One of these issues is the length of contracts. McCarthy thinks both short and long- term deals should be offered by National Grid: "On the latter, the levels of commitment required from flexibility providers must not be so high as to preclude participation from any flexible asset classes which cannot guar - antee their availability weeks or months ahead. "We believe that delivery of services from long term to short term to real time should be covered by the same contract, enabling participants to provide services whenever called upon but with the certainty of long- term revenue streams." Felicity Jones, storage spe - cialist and partner at consultan- cy firm Everoze, also welcomes the plans to streamline frequen- cy response services. However, she cautions that the move towards real-time mar- kets will actually make figuring out optimal bidding strategies more complex, particularly given the opportunities there will be to vie for other ancillary services such as reactive power and black start capability: "The system needs aren't simple so it's just inevitable there's going to be more complexity here." It may be "tough for inves - tors to grapple with, because it is more complex and there is more merchant risk". On the other hand, she says, there will be upsides for those with the Creating a smarter system How will National Grid's changes to the way it procures frequency response affect existing market participants? Tom Grimwood reports. agility and know-how to "hop between" different services and capture their real-time value. Jones believes the main message from the consultation is that "value is really going to be derived from speed of response as much as size," adding: "People thought of EFR as being this kind of lightning quick response. But even that is going to look almost pedestrian compared with what we're going to be faced with in the future." On this basis, she suggests there will be little room for stor - age technologies. Jones notes that the system operators on the island of Ireland, Eir Grid and SONI, are already introducing a product with a required re - sponse time of just 150 millisec- onds: "Literally, within the time it takes to blink an eye." The faster response times are needed because of the decline in system inertia – the resistance of the power grid to changes in frequency – provided by con - ventional thermal generation. The hope is that fast-responding batteries will be able to provide synthetic – or "digital" – inertia. Jones says, when it comes to designing frequency response services to enable this, "the devil's really in the details". These details include the droop curves, which lay out what pow - er outputs should be produced in response to different frequen- cies, and the dead bands, which set the range of frequencies for which no response is required. "The more that you under - stand those details as a battery developer or owner, the more you can figure out how to provide that service more ef- ficiently," she adds. For the time being, they can only wait to see how National Grid responds. "We understand that National Grid did not adopt a 'blank sheet of paper' approach and in doing so may have missed an opportunity to lay the foundations for fundamental market reform." RORY MCCARTHY, ORIGAMI ENERGY COMMERCIAL ANALYST FOR STORAGE