Enhanced Frequency Response (EFR) Auction – Results Due 26th August 2016

Balancing the electricity grid at exactly 50 Hz is tricky; managing different generation types, fluctuating loads, and intermittent renewable energy. National Grid responds to changes in system frequency by paying energy generators and consumers to provide a frequency response service, where they react to changes in grid frequency by either increasing or decreasing power output. However, under the current arrangements some of these services can be relatively slow to respond.

National Grid has now introduced a service called Enhanced Frequency Response (EFR). EFR will become the fastest form of frequency response, delivering 100% power output within 1 second (or less) and providing minimum delivery durations of 30 minutes at a time. The EFR tender is not for a specific technology, although the majority of capacity is likely to be secured by battery storage projects with the remainder from alternative storage technologies such as flywheels, interconnection and demand side response.

Under the contract there is a minimum capacity of 1 MW and maximum capacity of 50 MW. Contracts are for 4 years duration which has been a source of concern for some investors, although it is likely that other revenue streams can be accessed beyond this time period.

National Grid is looking to secure around 200 MW of EFR through this first tendering exercise, although interest has been very high.  National Grid received 74 submissions of which 64 companies pre-qualified 68 projects, totalling 1.3 GW. Pre-qualification took place in late 2015 and it required submission of details such as company name, site location, programme of works, grid connection offer, land rights and financing but did not require planning permission to be in place.

The tender window closed on 15th July and since then participants have been waiting for the results which are due to be published on the 26th August 2016. After this the post tender milestone test is the 28th February 2017 and developments need to be available from the 1st March 2018.

Future EFR tenders are likely to be 2-3 times bigger and the upper cap of 50 MW is likely to be increased or removed. The long-term signals towards increased utilisation of storage technologies are clear and positive:

Utilising our extensive experience in delivering energy projects throughout the UK, Arcus can provide site finding and feasibility services and support throughout the planning process, from our in-house team of planning and environmental consultants. If you require any of these services on any of your projects please get in touch: 01904 715 470

If you are looking for some further information on energy storage – below are some insightful recent reports:

Making the Commercial Case for Batteries

Energy Storage: Cracking the Code