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This project ended in Mar 2023 and is now closed.

Generating Additional Markets for Mature Access to Flexibility (GAMMA Flex)

Network operators
  • National Grid Electricity Distribution
Funding mechanismNetwork Innovation Allowance
DurationJun 2022 - Mar 2023
Project expenditure£374k
Research areaFlexibility and Commercial Evolution
Regions
  • South West
  • South Wales
  • West Midlands
  • East Midlands
  • January 2023

    This is the concluding month of the project in which the project team have completed and received approval of both the Independent Market Operators Blueprint…

Objectives

We have a number of key objectives as follows: 

  • To develop a blueprint to allow secondary market trading 
  • To develop a blueprint to allow demand turn up services
  • To create a blueprint for longer flexibility procurement linked to short term flexibility 
  • To co-create a blueprint to link to ESO procurement of balancing services 

The need for secondary training - Allow FSPs to trade out of positions, over the longer term, secondary trading would be expected to build market liquidity.

The need for demand turn up services  - In areas of the network with a high penetration of renewable generation, including down regulation (generation downturn/demand turn up) could help free up network capacity and enable new renewable assets to connect.

The need for a link to longer term flexibility procurement -  There needs to be a link between the near-term market and flexibility purchased as longer term availability agreements. The link is needed to ensure that the most appropriate flexibility is activated.

The need for co-operation with the ESO - At present there is no direct link between DNO level flexibility procurement and ESO procurement of balancing services.

Problem(s) 

The IntraFlex project, which trialled closer to real-time flexibility procurement, identified several areas that need to be further developed for the market to mature. As part of IntraFlex, National Grid purchased flexibility services as 30-minute products, starting 7 days ahead of delivery and up until 90 minutes ahead of delivery, in a marketplace operated by NODES.

Whilst the project demonstrated that closer to real time flexibility procurement works and adds value, the project also identified a number of gaps that need to be addressed to build a liquid, well-functioning market.

The gaps that were identified included: 

  • Need for secondary trading – IntraFlex only allowed flexibility service providers (FSPs) to sell flexibility services. This prevents FSPs from trading out positions, e.g. in case an FSP is operationally unable to deliver flexibility it has sold or wishes to trade out of its position for commercial reasons. Over the longer term, secondary trading would be expected to build market liquidity and is a key OFGEM expectation.
  • Need for demand turn up services – IntraFlex included up regulation (generation upturn/demand downturn) only. In areas of the network with a high penetration of renewable generation, including down regulation (generation downturn/demand turn up) this service could help free up network capacity and enable new renewable assets to connect.
  • Need for baselining methodology to develop - IntraFlex applied a default baseline, calculated as a simple average across historic meter readings, and gave FSPs the option of overriding the default baseline with a baseline calculated by the FSP (submitted prior to trading). Feedback from FSPs that relied on the default baseline highlighted that a baseline based on historic meter readings can get distorted when the calculation includes periods for which the FSP has already delivered flexibility services. There is value in exploring the impact of different baselining methodologies further to better reflect positions.
  • Need for a link to longer term flexibility procurement - There needs to be a link between the near-term market and flexibility purchased as longer term availability agreements, such as Flexible Power. The link is needed to ensure that the lowest cost flexibility is activated, whether that means activating a longer-term agreement or purchasing flexibility in the near term market.
  • Need for cooperation with the ESO – At present there is no direct link between DNO level flexibility procurement and ESO procurement of balancing services. A link would help ensure flexible resources are activated where they add the most value to the system as a whole. A link would also be expected to help build liquidity in the DNO level flexibility market, as it would encourage FSP participation by enabling FSPs to participate with assets located both inside and outside of National Grid’s congestion zones and enable revenue stacking. Part of this is also being covered as a desktop research exercise under Project COMMANDER with ESO and will feed into GAMMA Flex.

The intention is to address these needs through a project where the near-term procurement developed as part of IntraFlex is continued and the five points above are addressed, through market designs. At the end of GAMMA Flex, it will be decided whether a trial will be undertaken, either through innovation one part of business as usual.

Method(s) 

The project will be delivered through four interlinked work packages as follows: 

Work PackageStart End
WP1 PM and reportingJun-22Jan-23
WP2 - Market Design & Blueprint - Milestone 1: Detailed market design stakeholder feedback complete Jun-22Jun-22
WP2 - Market Design & Blueprint - Milestone 2: detailed market design complete Jun-22Aug-22
WP2 - Market Design & Blueprint - Milestone 3: Detailed technical specifications stakeholder feedback complete Jul-22Nov-22
WP2 - Market Design & Blueprint - Milestone 4: Detailed operational and technical specifications complete Jul-22Jan-23
WP2 - Market Design & Blueprint - Milestone 5: Updated Rule bookAug-22Jan-23
WP3 - ESO Co-ordination Analysis - Milestone 6: ESO Co-ordination complete Jun-22Jan-23
WP4 - Operational Trials Design (Optional) - Milestone 7: Operational Trials Design complete Dec-22Jan-23
WP1 - Project Management and Reporting - Milestone 8: Closedown Report Nov-22Jan-23
WP5 - BAU Handover - Milestone 9: HandoverJan-23Jan-23