An update on changes to the markets we operate

Duncan Burt, ESO Director of System Operations, outlines recent and upcoming changes to the markets which we operate.

The energy landscape is rapidly evolving in line with UK net zero ambitions. As the Electricity System Operator (ESO) for GB, we will play our part by delivering on our ambition of zero-carbon operation of the electricity network by 2025. This means that in times of high renewable output, we will be able to fully use renewable generation, reducing and removing constraint payments from network management tools.

To support the work we are undertaking to achieve this ambition by 2025, there will be a number of changes to the markets that we operate. This update lets you know about all these exciting changes and the pipeline of activity, as well as how they link together with our pathfinder projects to put us on course for delivering 2025 ambition.

Through making these changes and developing new services, we aim to increase transparency around the decisions we make; and increase liquidity in markets to drive competition, innovation and ultimately the most benefit for consumers.

If you would like more information, you can read the more detailed market update by clicking the link below. And to make sure you are always up to date on any upcoming changes and announcements, follow our twitter account @NationalGridESO, or find us on LinkedIn.

Download the full market update

As part of our strategy we are looking for opportunities to develop and create new markets so that by 2025, we have the right solutions in place to support zero-carbon operation of the electricity system.  

We are making some changes to how we operate the GB electricity market. Within our response and reserve markets, we will be launching a suite of new frequency response products and further developing existing services. 

We are currently implementing changes to our reserve services in line with our Project TERRE commitments. Once these changes are complete we will review our slow reserve services.

We have made some changes to our delivery schedule. We’ve prioritised work on faster response services and flexibility, so that we can build these markets alongside the changes we are making to our IT systems, to allow us to aggregate dispatch or dispatch smaller players within the market. 

You can read more about the changes we are making to our response and reserve markets, in our upcoming Frequency Response and Reserve Roadmap.

To drive more competition across markets, we are increasing access to the Balancing Mechanism. This will allow a wider range of providers to participate in the balancing mechanism.

We have recently launched a series of pathfinders. These pathfinders explore the possibility of new markets for stability and reactive power, potentially creating opportunities for non-network companies to provide commercial solutions to challenges on the transmission system. Soon, we will also be launching a pathfinder looking at constraint management.

The findings from these pathfinders will help to shape our strategies for reactive power, stability and constraint management. If you would like to learn more you can visit the Network Development Roadmap page on our website here.

Throughout the year, we publish various documents that inform our stakeholders of analysis we have carried out, and the actions we recommend need to be taken forwards over the next decade, to get to a place where we can operate an ultra-low carbon electricity network.  

Our Electricity Ten Year Statement, Network Options Assessment and System Operability Framework reports set out the changing energy landscape and scope out the future requirements of the electricity network. Our Operability Strategy and Frequency Response and Reserve Roadmap then set out what we are going to do to meet these system requirements, and what we need from the markets which we operate. These publications all use our Future Energy Scenarios as starting point for our analysis.

The graphic below identifies key dates for these milestones: