- Explaining the Project LEO Flexibility Market Trials
Project LEO is an ambitious and innovative energy system project being run collaboratively by a number of project partners in Oxfordshire, with the aim of helping the UK government reach its 2050 net zero commitments. We will achieve this by running a series of local trials, advancing capabilities and facilitating active participation in the creation of a smart, local, balanced energy system to bring social, economic and environmental benefits for all.
The Project LEO trials can mostly be split into 3 areas.
Technical – These trials will focus on developing the IT systems and platforms needed for a flexible energy marketplace, as well as the actual assets required to deliver flexible energy services such as batteries, building management systems etc.
People – It’s absolutely vital to the success of Project LEO that we test how the different aspects of flexible energy markets actually work for people within communities. We’re conducting a number of trials to test this and also to ensure that any transition to a new energy system is fair and equitable.
Markets – This is possibly the most complex of the three areas to understand, so in this article, we aim to explain a bit more about our flexibility market trails, who is taking part, what we aim to achieve and ultimately, who will benefit.
Energy Flexibility Markets explained
Energy flexibility is all about either increasing or decreasing the energy you would ordinarily have been generating, using or storing just temporarily. Energy Flexibility Markets are where people and businesses can trade in providing energy flexibility. These trials are being run in partnership with the SSEN-led TRANSITION project until February 2023. TRANSITION, which is working closely with the Open Networks project and is testing energy system architecture for the move to a smarter network, supporting the UK’s net zero targets and the requirements of a Distributed System Operator.
Together, we are looking at how we design these marketplaces to make them easy to access and attractive to people who are buying and selling energy flexibility. We’re also looking at the benefits – commercial and otherwise – of trading energy flexibility and who will benefit from this. We’ll break each of these areas down into explanatory sections here.
Who can take part?
Our Flexibility Market Trials are designed to support the trading of flexibility services. In order to provide a flexibility service, you need to be able to make temporary changes to the way you consume, generate or store electricity when you are asked to. The energy network operator requests these temporary changes and decides which service is required having looked at various systems and identifying what the local network needs.
Therefore participants in the trials need to:
- Be able to make these temporary changes to what they are consuming, generating or storing in response to a request by the energy network operator.
- Be a business or organisation (not a domestic energy customer) although the trials do include some aggregators of domestic energy users to bring in those household assets.
- Be within one of our six trial areas in Oxfordshire.
- Sign our Flexible Services Agreement and share data on their assets.
What flexibility services are we testing?
As we test the turning up or down of generation, demand or storage of electricity, we look for businesses who can offer the network operator one (or more) of the following four flexibility services:
- Sustain Peak Management. This means participants are asked to decrease their demand temporarily or increase their generation at peak demand times
- Sustain Export Peak Management. This is where we ask participants to increase their demand or decrease their generation temporarily, when network usage may be low but generation high.
- Pre-Fault. This is where we ask participants to decrease their usage or increase their generation when we know there is going to be an outage (blackout) in the local system due to repairs and this can help keep the electricity flowing.
- Post Fault. As above this asks for a temporary decrease in usage and increase in generation when there is an unplanned outage (blackout) and we need flexibility at short notice to keep the lights on.
The temporary requests for these services are in response to the need of the local network operator to ensure there is enough electricity to cope with demand at the time, but not so much that it overloads the grid! There are various notice periods (ranging from a day ahead, a week ahead to the season ahead). The amount of money the DSO is prepared to pay to someone providing a flexibility service depends on several factors. You can read more about this here.
You can read more about the different flexibility services and their definitions here.
Peer to Peer services explained
We believe that this is one of the most exciting elements of the market flexibility trials. In the Peer to Peer services trials, we look at how two neighbouring organisations can temporarily trade any spare connection capacities that they have. These are basically their allowances for the maximum amount of electricity you can put into or take out of the grid.
Therefore, if an organisation isn’t using all of its import or export capacity, they are able to buy or sell the capacity temporarily to a network neighbour (an organisation connected at the same point on the network) in order to balance out the generation and use of energy.
The diagram below explains how this could work in the example of a solar farm and a neighbouring wind farm. On a particularly sunny day but with low wind, the solar farm may want to sell more than their capacity allowance of electricity back to the grid. And the wind farm may wish to exceed their import capacity to make up for the electricity they are not generating. The Peer to Peer services trials are looking at ways these two organisations can trade capacity if the DSO authorises them to do so.
What’s the benefit?
We hope to see a number of potential benefits for all participants in our Flexibility Market Trials, we have listed some of the key advantages to taking part below:
- An opportunity to influence the development of these emerging flexibility energy services.
- A chance to test their ability to provide flexibility within a safe space.
- In the trials, the markets are able to take a more asset/participant focussed approach than in a business as usual scenario, so again, it’s a safer space for testing.
- They have new revenue opportunities from the trading of flexibility services.
- The opportunity to deliver more with the assets and energy generation that they have through flexibility.
- The trials are strengthening the case for investment in their flexibility services.
- Getting a deeper understanding of how their assets behave and interact, helping them gain insights for future usage.
- They are helping support the journey to the UK’s zero carbon energy system..
Overall, while our Flexibility Market Trials are perhaps the most difficult to explain of all the trials we are running, we feel they are incredibly exciting in the opportunities and learnings that they offer. We hope this article has helped to explain the motivations and benefits behind them.
As with all the Project LEO trials, we look forward to bringing you some exciting information on the outcomes as we get it.