Friday 26 June 2020
World-first for Flexibility markets as UK Power Networks reveals biggest-ever tender
The latest round of contracts, worth £14 million, includes the world’s first ever agreements to provide flexibility on a low voltage electricity network.
This marks the latest stage in the company’s commitment to growing new markets for low carbon ‘distributed energy resources’ (DER), such as batteries and demand side response, while saving customers money on long-term investment decisions.
By managing the output of DER, instead of building new substations and laying more cables in the traditional way, UK Power Networks is reducing costs for consumers. Flexibility proposals were assessed to ensure they are benefitting consumers, by offering lower costs in comparison to the traditional approach of building new assets.
The 2019-20 flexibility tender was the largest in the UK in terms of number of locations, with 55 high voltage zones and 60 low voltage zones serving 10% of UK Power Networks’ customers – almost 2m homes and businesses.
Contracts are being agreed with a total of 16 different providers, for 42 of the high voltages zones and 15 of the low voltage areas. The flexibility providers include renewable energy plants, commercial battery operators, heat pumps and ‘virtual power stations’ backed by spare capacity in domestic batteries and electric vehicles.
UK Power Networks has led in the flexibility field since 2018, when it became the first network operator in the country to commit to a radical ‘Flexibility First’ approach to cater for new connections. The result of this latest tender round means that since 2019, the company has awarded flexibility contracts to 22 companies worth more than £14.5m for 142.3MW of power, up to 2027.
Head of smart grid development Sotiris Georgiopoulos said the latest tender round demonstrated the enthusiasm from the energy industry to participate in the growing market.
He said: “Three years ago we set out our Flexibility Roadmap and hitting more than 100MW is an important milestone that shows the market is really gathering pace. We could not have reached this without working really closely with the industry to co-design the products we’re offering and make the market open, transparent and accessible.
“Flexibility is the future because it is arguably the single most important element of a decarbonised smart electricity network. It gives us the flexibility we need to enable more renewable energy and forms a crucial element of the journey towards Net Zero.”
Piclo is a leading independent flexibility marketplace operating in the UK since 2013. It helps Distribution System Operators unlock flexibility by matching their requirements with flexibility providers and increasing competition through online auctions. Piclo CEO and Co-founder James Johnston said: "DSO flexibility markets are essential for the cost-effective decarbonisation of the UK's energy system. The success of this auction and our continued partnership with UK Power Networks is a big step towards reaching the UK's net-zero carbon targets.”
To find out more about UK Power Networks’ flexibility tenders visit: https://smartgrid.ukpowernetworks.co.uk/flexibility-hub/
