With increasing congestion on the electricity transmission system, a long lead time for network reinforcement, and fundamental market reform under consideration by the government’s Review of Electricity Market Arrangements (REMA), the ESO is launching the Constraints Collaboration project. This project is intended to enable the ESO and industry to work together to find solutions for thermal constraints, which can be implemented and deliver results in the short term. By results, we mean reducing costs to the consumer or reducing the curtailment of renewable generation (at no additional costs to consumers).
Summary
Transmission thermal constraint costs are increasing year on year as more renewable projects come online. The majority of constraint management actions taken by the ESO involve the redispatch or curtailment of generators, leading to increasing cost and carbon impact. ESO Electricity Ten Year Statement details that the flows of electricity across Scottish boundaries are expected to triple between 2022 and 2030, with associated costs estimated at between £500m to £3bn annually by 2030 and significant amounts of wasted renewable energy.
Both traditional network reinforcements and fundamental reform of the wholesale market will address these issues, but these take significant time so we must explore other options to reduce constraint costs in the short term.
We are aware that alongside the ESO, the issue of constraint management is being considered by many in industry, with potential solutions being discussed at different forums. Part of the intention of this project is to collate different potential solutions, allowing us all to build on each other’s ideas and develop solutions, which are supported by both industry and the ESO.
Between January and February 2024, ESO ran the Constraints Collaboration Project (CCP) with the industry to find solutions for thermal constraints, which could be implemented and deliver results in the short term. A total of 30 responses were received from industry. Most of the proposals were discussed at our regular webinars, while the remainder provided useful feedback which ESO will reflect on.
We have now categorised proposed market-based solutions received into 3 main themes:
- Constraints management markets
- Using flexible assets to reduce the flow over boundaries
- Increasing how much can flow over boundaries
Further details of outcome and feedback received from the industry can be found in the excel document below.
Constraints Collaboration Project: Summary of Responses
Detail of outcome:
The summary of responses sets out respondents’ views on the following areas covered in the Constraints Collaboration Project:
- Overview of proposed solution that address constraints
- Value to ESO market design framework (efficient investment, efficient dispatch, value for money)
- Impact and implementation
Detail of feedback received:
We received 30 responses from 13 organisations, including:
- generators and developers
- public body
- academics
Submit your feedback on the market-based solutions received through the CCP
This form enables industry to continue to build on the solutions received through the CCP and provide opportunities to assess how the solutions perform sufficiently against ESO’s market design framework (MDF), which aims to assess the trade-offs between efficient dispatch, efficient investment and value for money.
Submit your views on market-based solutions received from the industry
We will use this page as a central repository for all ideas submitted and enable commentary and the development of ideas in a collaborative way. In partnership with industry, we will assess the potential new ways of addressing the costs of thermal constraint, focusing initially on the network boundaries with the highest volumes of thermal constraints as highlighted by the Electricity Ten Year Statement. Any potential solution should be implementable ahead of significant planned physical infrastructure and be complementary to any wider code or wholesale market reforms.
We will assess any proposed market-based solution against the ESO’s Market Design Framework (MDF), which aims to assess the trade-offs between (i) efficient dispatch, (ii) efficient investment and (iii) value for money. Any solution also needs to be technology agnostic, not impact adversely on system operation, administratively feasible for ESO and does not require legislative changes. Once we have assessed the different options, we will share the outcome and any projects we see as a viable option to take forward for further development.
Our desired outcome is a scope for a new product(s) co-designed with industry, which we can progress to detailed scoping and delivery.
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| Activity | Indicative Timeline |
|---|---|
| ESO industry webinar on thermal constraints management | 18 January 2024 |
| Six-week industry collaboration period live on webpage | 18 January – 29 February 2024 |
| MDF assessment of best ideas | April – June 2024 |
| Publish results of assessment plus preferred option(s) | Summer 2024 |
Show and listen: sharing methodology to assess industry ideas for the constraints collaboration project (CCP) - 23 April
| Watch the webinar | Download the slides |
Sharing Market Based Solutions for the Constraints Collaboration Project - 20 March
| Watch the webinar | Download the slides |
Sharing storage-based solutions for the constraints collaboration project – 7 March
| Watch the webinar | Download the slides |
Sharing ideas for the constraints collaboration project webinar - 9 February
| Watch the webinar | Download the slides |
Finding solutions for thermal constraints webinar - 18 January
| Watch the webinar | Download the slides |
Previous events
Watch the recorded presentations by pressing the play icon on the image or download the slides from each session using the link above the image.
Sharing methodology to assess industry ideas for the constraints collaboration project (CCP).
Sharing Market Based Solutions for the Constraints Collaboration Project - 20 March
This webinar gives an overview of market based solutions for the constraints collaboration project.
Sharing storage-based solutions for the constraints collaboration project – 7 March
This webinar gives an overview of storage based solutions proposed by the industry.
Sharing ideas for the constrains collaboration project webinar - 9 February
This webinar gives an overview of the market-based solutions proposed by the industry so far.
Disclaimer
Please note that this collaboration is not a formal part of any procurement exercise and does not indicate a formal or firm commitment for future commercial opportunities from the ESO. Submitting this collaboration also does not commit you or your organisation to any specific course of action.