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14 November 2019

Cornish testbed spits out ‘world first’ virtual energy marketplace

National Grid, Western Power Distribution, and Centrica have announced what they believe is the first coordinated flexible energy procurement project, based on Centrica’s Local Energy Market (LEM), where consumers and DER generators in Cornwall will be able to sell electricity through the virtual energy marketplace. The pilot is an important step in the journey towards a properly distributed smart grid ecosystem, but there is still a long way to go.

This is the latest update in the testbed, the final component needed, which is exploring how each component of the grid will be modernized. National Grid, specifically its Electricity System Operator (ESO) wing, needs to know how it integrates its national operations with Western Power Distribution’s local networks. The latter is the Distribution Network Operator (DNO) for the South West, Midlands, and South Wales regions. There are some 23 DNO region licenses in the UK, which are overseen by the regulator Ofgem.

National Grid itself runs and owns the UK’s national transmission networks, the cables and pylons, which move electricity between the regional DNOs and the generation assets in the grid. It is a Transmission System Operator (TSO). National Grid ESO is a legally separate entity, which, as it puts it, balances the system in real-time, matching supply with demand – and it really wants you to know that it is separate and impartial from National Grid. Your mileage may vary.

Either way, the Cornish LEM is attempting to demonstrate how energy storage, DERs like rooftop solar, and technologies like DR can be combined to create a new type of flexible electricity grid. Back in the day, the flow of electricity was very much one-way – from centralized generation and then out to customers at the edge of the network. Now, this architecture is changing, to incorporate renewable energy generation and, of course, electricity production from the customers themselves.

This requires a grid that is capable of taking electricity upstream from the customers, and putting it to use elsewhere in the grid – although likely very close to those customers themselves. Specifically, it requires the Transmission and the Distribution networks working in harmony. As for the end-points, Sonnen batteries and solar panels have been installed in 100 homes, and some 125 businesses have also had flexibility and monitoring equipment installed. Current took an in-depth look at the project back in May.

The LEM essentially works by having participants place bids on ‘flexibility,’ meaning whether they need more or less electricity supplied. These bids are placed well in advance, and then rationalized between the supply and demand needs – using a clearing system built by N-SIDE. In theory, this lets renewable energy be more easily incorporated into the energy mix, but increased smart grid and IoT adoption will help reduce the time needed to place and organize these bids, as well as facilitate near real-time demand response.

“As we move towards our 2025 ambition of being able to operate the British electricity system carbon free, we are seeing more renewable generation come online – such as wind and solar – which requires increased flexibility to balance the grid. Initiatives such as the Cornwall scheme help us deliver secure, sustainable and affordable electricity – softening peaks in demand and filling in the troughs, especially at times when more power is available. And it’s cleaner too. Even though we’re in the early stages of the trial, we’re looking forward to evaluating the results,” explains Colm Murphy, Electricity Market Change Development Manager, National Grid ESO.

The next phase for the LEM will be testing that leads to a report. This will be the most interesting part of the project, when we learn whether the parties have discovered a repeatable model that could be extended to the rest of the country, and ultimately exported abroad.

Pieter-Jan Mermans, director of optimization at Centrica Business Solutions, said: “Improving grid flexibility benefits everyone from generators to consumers, and these trials represent a major step forward. We are hugely grateful to the householders and businesses across Cornwall who have embraced this trial with open arms, and we look forward to providing a full update after the trials conclude in spring 2020.”

One of the looming hurdles on the horizon is the issue of incorporating the largest industrial customers to such LEMs, where there is very little tolerance for service disruptions. Similarly, in large cities, the largest buildings there are going to be difficult to accommodate, because the primary focus of such customers is not energy consumption or optimization. However, as there are so many component parts, there are innumerable IoT opportunities to connect and control equipment that can be orchestrated at sufficient scale.