In the United Kingdom, it’s the responsibility of the National Grid SEO to keep the lights on across the country. The balancing mechanism plays a key role in ensuring the maintenance of the grid, and the government is currently in discussions with various companies to look for ways of improving the frequency response to the way that our electricity is managed.
The importance of the Balancing Mechanism for power in the UK
In October 2021, a frequency response ancillary service was trialled, which saw the start of what would eventually become an overhaul of the grid services market. It’s an attempt from the National Grid to stack the Dynamic Containment (DC) revenues that they earn from the Balancing Mechanism. The Balancing Mechanism is the real-time management of supply and demand in the grid, which is also a key earning strategy for battery energy storage assets.
The potential role of battery energy storage
Those at the forefront of battery energy storage in the UK have already started providing frequency response in the DC market. In the not-so-distant future, battery energy storage companies will be able to tender for bids in Balancing Mechanism and DC within the same period, highlighting just how attractive the battery energy storage sector is becoming. So far, we’ve seen the UK government adopt a cautious stance in regards to bidding in the Dynamic Containment sector, but this is likely to change in the near future.
Although companies hoping to participate in BM must ensure their activities don’t compromise the ability to deliver DC, we’re likely to see growth in the role that energy storage solutions will play. Companies will have to adhere to strict regulations in regards to maximum and minimum import limits, as well as several other cautious baselines. Still, the opportunities it presents to the National Grid ESO and battery energy storage companies are exciting.
This is because battery energy storage is regarded as a versatile asset that can help the grid in multiple ways. When installed in the front-of-the-meter, battery energy storage can revenue stack or generate income from multiple sources. Companies have used this as evidence that battery energy storage presents a strong business case to the National Grid ESO. At present, regulatory, policy, and market frameworks are cumbersome and don’t currently allow for the most recent advances in battery energy storage technology.
But by allowing stacking, the value proposition of battery energy storage in the UK will continue to grow. For more information about battery energy storage or to find out how AceOn is leading the charge, take a look through our current battery energy storage solutions.
