With Project TraDER wrapping-up, we wanted to share some of the new high-water marks that the project established for a bottom-up transactive energy system, alongside the top 5 lessons learnt for driving future value from distributed flexibility markets.
Background
TraDER was funded as one of two projects in the BEIS FleX competition designed to; “increase low-carbon generation to the grid by creating new revenue opportunities for clean technology operators through the coordination of local and national energy markets.”
This funding mechanism enabled us to bring together a broad church of energy industry specialists including CGI, Community Energy Scotland, EDF, Elexon, Energy Systems Catapult and Kaluza, supported by National Grid ESO, and Scottish and Southern Electricity Networks.
Achievements
The various expertise brought to this collaboration made it possible to go beyond examining the technical delivery requirements of the markets pioneered by TraDER, also exploring the consumer proposition and the broader implications of scaling up such a model across UK plc.
The flexibility market designs selected to be trialled were:
– A distribution-level market, in which wind turbines that were being curtailed could pay local flexible resources to create space on the local network to bring them back on-line (demand turn-up in practice, though generation turn-down also in theory)
– A national-level market, based on National Grid ESO’s Optional Downward Flexibility Management product, in which ESO procured and paid for demand turn up from the same set of distribution connected assets.
TraDER was able to prove a number of new milestones in distribution-level flexibility markets. These included first-of its kind market platform that was:
– Operating in real-time and affecting physical power flows (not just post-fact accounting)
– Enabling Distributed energy resources (DERs) to exchange value directly with one another
– Pioneering a new model for neutrally facilitated markets, in which the Distributed System Operator enabled transactions but did not directly procure its own flexibility products
– Aggregating visibility of national and local requirements for demand turn-up on the same market platform.
Key Learnings
Launching this new model for the operation of distributed energy marketplaces enabled us to study some of the key enabling factors of these new trading arrangements. However it also made it clear where further development was required for such trading arrangements to scale nationally. Here are our top 5 themes:
1) Active Network Management (ANM) systems and Flexible Connections
The distribution-level market was enabled by the existence of an ANM system, which was able both to communicate network capacity scarcity (i.e. trading opportunities) and secure the network in case flexibility could not deliver. As a result, demand-turn up could be delivered on a best efforts, upside-only basis.
This supports a win-win-win market in which renewable generators can increase revenue, customers can access lower power prices and the UK benefits from a higher proportion of power supplied by renewables.
2) Customer engagement, leading to ability and willingness to participate in new markets
The prior, and ongoing, work on community and asset engagement, in particular that undertaken by Community Energy Scotland and Kaluza in the Heat Smart Orkney and SMILE projects, meant that we could mobilise trading rapidly within the scope of TraDER. Additional ongoing community engagement and asset deployment work on Orkney, such as by the consortium members of the ReFLEX project, will drive further flexible capacity.
However, the volume of curtailed wind today far outweighs the volume of flexible capacity ready to offset it and this is likely to persist in the medium term. Closing this gap as quickly as possible will require both policy support, i.e. mandating flexibility standards, and new consumer service propositions to encourage consumers to enrol new assets into such trading arrangements and support consumers during asset integration to ensure consumer service levels are maintained.
3) Asset digitalisation and automation
This was a market of many small actions, reactions and adjustments. Within the course of TraDER, the local curtailment market supported 24k micro-trades of 8.3MWh in total. Consequently, automation of asset dispatch is key to furthering friction-less participation on a time and cost-efficient basis.
In addition, the dispatch and response time of flexible resources needs to inform market design. The hot water heaters and batteries taking part in TraDER could respond to price signals in real-time. Other local flexible potential, such as hydrogen electrolysers, required advance notice and thus curtailment forecasting intelligence would have to be layered on top of the market platform to support the participation of additional flexibility resources.
4) Coordinated access to multiple revenue streams
Local market platforms present a new vector or aggregation: by region instead of by technology or single dispatch platform. These market platforms can, in turn, increase value for asset owners and operators by presenting local and national trading opportunities and, in doing so, expose and prevent the risks of double-payment or non-delivery.
In the context of TraDER, it was crucial that the national demand turn-up market did not trigger the ANM system to release additional curtailed generation, and thus reverse National Grid ESO’s trade. This was one of the key reasons that National Grid ESO’s Optional Downward Flexibility product had excluded ANM connected assets from participation. However, since ANM systems are only installed in regions with network constraints, these are exactly the regions in which additional flexible capacity should be encouraged, and thus a coordinated solution is highly desirable.
TraDER was able to provide distribution-connected flexibility, within Orkney’s ANM zone, access to both local and national price signals in different time periods. Initially, TraDER had also intended to take this a step further, enabling distribution-connected assets to sell their location and net balancing effect in two different markets in the same time period. However this ambition required two changes that fell outside the scope of the Project:
a) The alignment of time periods for procuring and delivering local and national markets
b) A two-way data feed, from the market platform back into the ANM system to assign ownership of the flexibility procured.
This leads us onto the next key market enabler.
5) Data exchange between market and system operation platforms
Scaled up operation of a local market platform requires a greater deal of integration between the ANM system and the market platform, potentially even a two-way exchange of data.
This integration could have enabled a new type of local market, for example, the dynamic rearrangement of curtailment queue stacks. Such a market could, and arguably should, coexist with the demand turn-up market delivered by TraDER.
Further integration would prevent other key risks of scaling local markets such as:
– Asset cycling: in which a demand turn-up event is triggered by the curtailment of a renewable generator, which in turn releases the generator from curtailment, releasing the demand-turn up asset, plunging the renewable generator back into curtailment
– Market conflicts/ double trading: in which demand turn-up or generation turn-down is procured in a national market but then used to release additional local capacity.
SSEN are currently undertaking further work to determine the scope of such a data exchange for unlocking additional value in Orkney and other actively managed regions.
The Energy Systems Catapult will shortly be publishing a longer form report on TraDER – watch the space!
