National Grid plc · LSE:NG.
National Grid — Operational Forum June 2008
32 slides from National Grid's conference presentation, June 2008
Slide 1: Contract Development update
Contract Development update
Slide 2: Agenda
Agenda STOR Reactive Constraint Management Service Firm Frequency Response / Fast Reserve Improvements to contract transparency Constraints Commercial Frequency Response Balancing Mechanism System Replacement
Slide 3: STOR Annual Review
STOR Annual Review General STOR Standard Contracts Terms Review Develop longer-term services in STOR - meet future reserve requirement - promote competition - enhance efficiency
Slide 4: STOR Annual Review
STOR Annual Review Key Areas of Review - timescale of the longer-term services - use of indexation for utilisation payments - dealing with uncertain future STOR windows
Slide 5: STOR Annual Review
STOR Annual Review Indicative Timetable of the Review June - August 08 Develop the proposal of STOR longer-term services September - October 08 Invite the industry to comment on the proposal November - December 08 Consider the feedback, finalise and publish the Standard Contract Terms We wou
Slide 6: Agenda
Agenda STOR Reactive Constraint Management Service Firm Frequency Response / Fast Reserve Improvements to contract transparency Constraints Commercial Frequency Response Balancing Mechanism System Replacement
Slide 7: Reactive Power Market Review
Reactive Power Market Review Reasons for review: Low and decreasing number of participants 100% 80% 60% Declined to tender 40% Unsuccessful 20% tenders 0% Successful 1 2 3 4 5 6 7 8 9 101112131415161718192021 tenders Tender round
Slide 8: Reactive Power Review
Reactive Power Review Reasons for review: Low and decreasing number of participants Comments received regarding long lead times between submission of tenders and commencement of Market Agreement Minimal participation in Enhanced Reactive service Complex and onerous assessment process
Slide 9: Reactive Power Review (Cont.)
Reactive Power Review (Cont.) Scope of Review: Tender process – timescales, frequency Simplification of tender process Simplification of assessment process Consider use of Framework Agreements
Slide 10: Reactive Power Review (Cont.)
Reactive Power Review (Cont.) Indicative Timescales: June - August 08: Develop proposals for Reactive Power market September - October 08: Seek feedback from industry on proposals November 08 - January 09: Raise CUSC Amendment Proposal Feedback We would welcome further feedback on the cu
Slide 11: Agenda
Agenda STOR Reactive Constraint Management Service Firm Frequency Response / Fast Reserve Improvements to contract transparency Constraints Commercial Frequency Response Balancing Mechanism System Replacement
Slide 12: Constraint Management Service: Update
Constraint Management Service: Update Keen to encourage participation in the service Feedback suggests potential service modifications: ‘BMU level’ rather than ‘station level’ Standardised fuel efficiency factors Would allow tenders for a proportion of Would allow greater transparency of price
Slide 13: Agenda
Agenda STOR Reactive Constraint Management Service Firm Frequency Response / Fast Reserve Improvements to contract transparency Constraints Commercial Frequency Response Balancing Mechanism System Replacement
Slide 14: Review to date
Review to date Fast Reserve New Standard Terms and Conditions Posted on the website for comment October 2007 Specified tender months for longer-term tenders Additional flexibility for providers who need to invest Firm Frequency Response New Standard Terms and Conditions Posted on the website
Slide 15: Comments received
Comments received Fast Reserve The ability to tender more frequently for longer-term tenders Timing of multi month tenders should be five days earlier For longer-term tenders indexation should be considered (RPI or market index) Firm Frequency Response The ability to tender more frequently f
Slide 16: FFR/Fast Reserve Review 2008
FFR/Fast Reserve Review 2008 Way Forward More work required to establish revised terms Partnership between Fast Reserve and FFR review to ensure consistency Working Group 4th July, in Warwick to debate relevant enhancements to both services Please direct queries / request place on working
Slide 17: Agenda
Agenda STOR Reactive Constraint Management Service Firm Frequency Response / Fast Reserve Improvements to contract transparency Constraints Commercial Frequency Response Balancing Mechanism System Replacement
Slide 18: Improvements to contract transparency
Improvements to contract transparency Industry feedback to improve transparency but Need to balance between commercial confidentiality and transparency Less interest to offer services due to sensitive information being shared Failure to agree amendments to existing agreements Balanced agains
Slide 19: Improvements to contract transparency
Improvements to contract transparency Need to ensure data items that may be published are specified in agreement Limit data items to those necessary and only to better facilitate licence conditions efficient, economic and facilitate competition Two areas presently being reviewed Constraint
Slide 20: Proposal to publish constraints data
Proposal to publish constraints data Constraints data published monthly on the National Grid website Data based on Settlement data Data published within 2 weeks of receipt of Settlement data, or 6 weeks after end of month
Slide 21: Proposal to publish constraints data
Proposal to publish constraints data Data will be aggregated into Within Scotland ‘Cheviot’ Scotland – England boundary Within England & Wales (broken down as necessary) Data will be separated into import and export constraints Separate tables will be provided for BM actions Trades
Slide 22: Proposal to publish constraints data
Proposal to publish constraints data BM actions and Trade data will cover Energy Costs Constrained Volume Average Price of Action Average Energy Replacement Price Total Direct Cost Sterilised Headroom Costs Margin Replaced Average Margin Replacement Price Average Energy Reference
Slide 23: Proposal to publish constraints data
Proposal to publish constraints data Constraint Contract data Constrained Volume Time and dates active Cost Intertrip data No of times armed Arming hours Availability payments Cost
Slide 24: Commercial Frequency Response – What is it?
Commercial Frequency Response – What is it? Established prior to CAP047 Allows providers to offer an alternative more cost effective frequency service Where the cost of providing the mandatory service was prohibitively high, a lesser more cost effective service could be offered If plant was
Slide 25: Commercial Frequency Response – Why Change?
Commercial Frequency Response – Why Change? CAP047 introduced to provide a competitive market for Mandatory Service It established a mechanism to allow monthly price changes and publication of these prices and capabilities Transparency allows providers to adjust their prices in response to mar
Slide 26: Commercial Frequency Response – Why Change?
Commercial Frequency Response – Why Change? Feedback from service participants Unable to see prices and capabilities of Commercial Frequency Response Further transparency will lead to more efficient pricing and facilitate better competition
Slide 27: Commercial Frequency Response – What Changes are required?
Commercial Frequency Response – What Changes are required? Commercial Frequency Response clauses in the providers agreements will need to be changed to:- Limit price changes to once a month with a cut-off date co-incident with the closure of the FRPS system To allow publication of the prices a
Slide 28: Next Steps
Next Steps Further feedback is requested before moving forward with any changes Are we proposing to publish too much / too little data? Do you feel this will better facilitate our licence objectives? Do you feel this will impact service provision? Please direct feedback to David Smith on 0
Slide 29: Agenda
Agenda STOR Reactive Constraint Management Service Firm Frequency Response / Fast Reserve Improvements to contract transparency Constraints Commercial Frequency Response Balancing Mechanism System Replacement
Slide 30: National Grid Balancing Mechanism (BM) System Replacement
National Grid Balancing Mechanism (BM) System Replacement Current BM System • BM system is the tool used by the System Operator for the real-time management of supply and demand • It interfaces with market participant systems and settlement systems, and delivers data to the BMRS • Current system com
Slide 31: National Grid BM System Replacement (cont.) Industry views
National Grid BM System Replacement (cont.) Industry views • A number of significant industry changes on the horizon • National Grid wishes to gain an understanding of what this means for industry participants in terms of what the BM system needs to achieve • Industry views will enable us to more fu
Slide 32: National Grid BM System Replacement (cont.) Industry Engagement Process
National Grid BM System Replacement (cont.) Industry Engagement Process • Initiate industry engagement process – June ’08 Ops Forum • Industry workshop – July ‘08 • Issue consultation – August ‘08