Ensuring that electricity can get to where its needed securely day or night sits at the heart of our work at the ESO and I’m proud of our record of delivering one of the world’s most reliable networks.
Reliability doesn’t happen by chance. It’s the product of meticulous planning from across the industry, making sure the right tools and processes are in place so engineers can expertly keep the grid in balance. It also requires careful management of the key properties of electricity, such as frequency, voltage and inertia.
We are transitioning from a highly centralised network focused on the output of large fossil fuel generators to, smaller dispersed sources of power. How these decentralised generators interact with the network creates new issues for the ESO to manage, through greater frequency changes and lower system inertia.
Since the frequency event on 9 August 2019, we have been working with industry to improve the visibility of how we manage reliability. And over the past year we have been working collectively to develop a new annual report, which will for the first time set out in detail how the ESO balances cost and risk in managing frequency on the network. Earlier this year we consulted on the methodology that will govern these new reports and today we are launching a further consultation to ensure that the final report will deliver for the ESO, industry, Ofgem and government.
The first official report will set out the parameters for acceptable frequency changes on the network and will set out the criteria by which the ESO will approach the risks on the system for the coming year, assessing the cost vs risk balance of different operational approaches.
As part of our draft report consultation we are setting out our preferred operating position, to help industry colleagues review our methodology and findings and to provide context for alternative proposals covered in the consultation. Our current central recommendation proposes to keep managing risks at a similar level as today, placing the risk of a significant frequency event at a 1 in 22-year likelihood. By maintaining this risk level for the management of frequency changes on the network we estimate the indicative cost of frequency balancing will be around £244million.
Alongside this recommendation there is also a clear argument for the energy industry to take additional actions in delivering the Accelerated Loss of Mains Change Programme and further development of the Dynamic Containment service, to mitigate and reduce existing frequency risks.
From 2025 we plan to able to operate the network at zero-carbon, without the need to run fossil fuel generators to help balance frequency or inertia.
We do not believe this will have an impact on overall reliability and will in fact mean a greener grid, with new products and increased competition ultimately leading to better value for consumers.
To support our transition to zero-carbon operation these reports will in future years continue to evolve to ensure we address the fundamental issues facing the network as they emerge. The reports will also make annual recommendations on how to mitigate existing risks, ensuring we maintain our existing high levels of reliability.
Our hope is that this approach will also support a reduction in balancing costs, by removing risks that our control room must mitigate against on a daily basis.
READ THE FULL REPORT HERE
We look forward to hearing feedback on our report and continuing to work closely with stakeholders across the industry.