The publication of the System Needs and Product Strategy (“SNAPS”) consultation in June 2017 was the first National Grid deliverable as system operator (“SO”) of its ambition to improve balancing services and markets by providing greater clarity and investor certainty. SNAPS summarised future UK electricity transmission system needs into five key products: (1) Inertia, (2) Frequency Response, (3) Reserve, (4) Reactive Power and (5) Black Start, and asked how these and associated information provided could be improved. Following the SNAPS consultation, the SO has published four out of five product roadmaps of actions, providing a detailed plan showing milestones for how the SO’s proposed strategy will be implemented in relation to Frequency Response/Reserve (December 2017), Reactive Power (May 2018) and Black Start (May 2018). We draw out some of the key points from these Product Roadmaps below.
The number of providers of balancing services to the SO has recently grown dramatically from 20 just a few years ago to over 350 in 2017. The market has also seen the transformation of the providers, from large transmission-connected thermal plant to small distribution-connected conventional and renewable generation, aggregation and storage. These developments and associated challenges have prompted the SO to launch the SNAPS process.
The SNAPS consultation revealed issues around accessibility, complexity and transparency which the Product Roadmaps seek to address. A detailed overview of the responses from market participants can be viewed here: Future of Balancing Services web page.
The SO sees a solution of these issues as a three-stage process of changes to the balancing services products:
- Rationalisation of the existing product suite through removal of obsolete products;
- Simplification of remaining services through standardisation and greater transparency of T&Cs, procurement windows and assessment methods; and
- Improvement of services in conjunction with industry.
Product Roadmaps of Actions
Click here to view the table.
The implementation of the proposals set out in the Product Roadmaps will largely be complete by 2021. However, further changes are likely depending on the outcome of the various trials set out in the Product Roadmaps and further development of the GB and wider electricity markets. Nevertheless, the SNAPS process should enable new participants to enter the balancing services market and provide new revenue opportunities to electricity generators.