Our licence obligations
At the ESO, we have a licence provided by Ofgem and a requirement to operate a safe, reliable and efficient network. As such, we have a set of standards that the ENCC must meet. Our regulation means that we focus on continuation of service, using the cheapest power available on the system at any given time. Put simply, we are agnostic to the type of generation running – however, we do look to report on the carbon impact of what is running.
As part of our licence, we’re required to plan, develop and operate the National Electricity Transmission System (NETS) in accordance with the System Security and Quality of Supply Standard (SQSS). With unforeseen events, such as a lightning strike and generation loss, we need to achieve a balance between holding lots of “backup” power – which is costly and ultimately has to be paid for by the consumer – while also maintaining reliability of supply and covering for risk. The SSQS dictates the amount of “backup” power the ESO holds. This amount is currently calculated as the largest infeed to the system at any time.
The ESO is also required under its licence to comply with the Grid Code, which is the technical code for connection and development of the NETS. This sets out the detailed operating procedures and principles that govern the relationship and interactions between the ESO and users of the NETS, such as generators and other users.
Under these requirements, the ENCC has two key functions – forecasting and managing the flow of energy and balancing supply and demand on a second-by-second basis. Together, these roles make sure that electricity is provided across the network in a way that is as timely, reliable and affordable as possible.
GB’s transmission network
Before exploring the ENCC’s demand forecasting and balancing functions, it’s important to understand the ESO’s role within GB’s transmission network.
The transmission system is the physical infrastructure used to move electricity around the system – think towers, pylons and electricity lines. The ESO does not own or maintain any transmission assets. Instead, these are owned by Transmission Owners (TOs).
In Great Britain, we have national and local transmission networks. National networks are like a motorway, while the local transmission networks are like the diverging smaller roads. The ESO operates the national part of the system. Once electricity arrives at local networks, Distribution Network Operators (DNOs) take it to consumers.
There are two types of generation on the transmission network – transmission-connected generation and embedded generation. The ENCC can see connected generation, but not embedded generation, which is embedded in the local networks. This means that to understand GB’s electricity demand, we need to have a view and forecast wind, solar and other local generation types that aren’t visible on the national network.
To do this, the ENCC conducts close to real-time demand forecasting to predict the minute-by-minute demand changes that will occur on the transmission network. Putting this demand forecast alongside the generation available helps us to manage the system and balance both sides.