In December 2023 NESO launched the Open Balancing Platform (OBP) – one of the primary objectives was to increase the utilisation of battery energy storage.  The first stage of the OBP was enabling bulk dispatch of BMU assets, allowing hundreds of dispatch instructions to be sent at a single click of a button.  This optimisation enables technologies like battery energy storage to play a more active role in balancing the network during imbalance periods.  The OBP is expected to be completed by March 2027 (based on NESOs webinar, September 2024) and will fully replace the balancing mechanism as well as the ancillary services dispatch platform (the system used by NESO to procure operational reserves and contingencies)

The OBP will also be compatible with the new quick reserve service which launches in December 2024, with the auction commencing next month (mid-November 2024 at the time of writing) as the name implies, this is a service that requires fast response times, that is well suited for a battery, perhaps even only by batteries.  In the fullness of time, NESO plans to further refine the OBP capabilities to create a fully comprehensive platform.

2025 will see constraint management support tools launch (although this isn’t anticipated to contain game-changing improvements for BESS), and new energy storage parameters (that are expected to have improvements for BESS) which should buck the trend of <15min dispatches for BESS.  15 minutes has typically been all NESO could see in the control room, and had no visibility beyond that without sending another 15min dispatch instruction and waiting for the BMU to report its Maximum Export Limit (MEL) and Maximum Import Limit (MIL), hence why they have been typically limited to <15min dispatches, with the new energy storage parameters this may shift more favourably towards longer dispatches for BESS.

Whilst this on paper sounds positive news for BESS, the skip rates remain high (over 90%) with NESO still favouring dispatching higher carbon assets.  However, August saw the highest on record of dispatched volume for battery energy storage, 73GWh in fact (Source: Balancing Programme Webinar September 2024 PowerPoint Presentation (neso.energy)).  More recently, batteries have been able to secure higher revenues remaining outside of the BM, however, batteries in OBP earned the highest revenues in the BM.

Batteries are more often being used for constraint management, where a constraint (for those non-power engineering) is a limitation on the amount of, or a minimum requirement for a parameter within the network (such constraints might be voltage, heat, frequency [stability]).  When that limit is exceeded, it could result in a loss of supply or interruption.  An example in simple terms, a transformer might be rated for 132kV, and without constraint management, the voltage through the transformer could exceed the maximum rating, leading to damage to the equipment, fires, or in the very worst case, a loss of life.

Constraints are not managed through the OBP, they use the legacy system (the predecessor to OBP) although NESO plans for this to move into OBP in time.

NESO published its plans for the OBP over the next 12 months, which will see several improvements to its services. October through December aims to see enhanced dynamic response and MWs dispatched, and updates to the legacy algorithm for the balancing mechanism.  Q1 25/26 (Apr-Jun) may see the new storage parameters (this has been flagged as moving to a later date)

In conclusion the next 12 months should see improvements to NESOs services that will greater the impact that battery energy storage has [as the most flexible asset class at NESOs disposal] and overall energy markets, as well as improving the resilience for GB as we transition to a renewable grid.

Recently, UKPN hosted a webinar which outlined their proposed changes to grid connection applications, outlining the new ‘reforms’ they intend to put in place from the 1^st November 2024, driven by the Connections Action Plan from Ofgem in 2023. The new requirements for developers are as follows:

• Must provide a Red Line Boundary, a detailed site layout plan including asset location, a detailed engineering design plan (new requirements) and a Single Line Diagram for the project (existing requirement).
• Must provide a Letter of Authority with Exclusivity to the land with a 36 month option (enhanced requirements).
• Must provide a project plan including main stages of the project, key milestones, target dates for connection and commissioning, in-depth studies, planning dates, lead times and construction dates (new requirement).
• Must provide Part 4 of SAF application form (new requirement).

As Developers, it is disappointing that it appears the only consultation that was done on this reform to the connection application process is with ENA and the Connections Process advisory group. Considering only a small group of developers form part of this group, we would have expected that a lot more effort is put in by the DNOs to engage with developers considering this change will mostly affect them, prior to its implementation in November to ensure requirements are realistic.

Root-Power have approached UKPN and other DNOs, as well as the ENA, to try understand this new policy in more detail prior to its implementation. So far we haven’t had any responses. Our main takeaways so far are as follows:

• Although increasing the application requirements is a step in the right direction which will hopefully reduce the number of developers which submit applications for speculative projects which are clogging up the connections queue, more focus needs to be done on managing the existing connections queue and reducing and managing the over-saturation which is already existent in the grid network.
• DNOs need to ensure these requirements are realistic and we are disappointed that more effort wasn’t made by DNO’s to consult Developers before implementing this change. For example, requirements for detailed engineering plans, designs, and programmes are not realistic even for many experienced developers, as at the application stages many of these details will not yet have finalised or agreed. To expect this work to be done at such an early stage of the development process, prior to getting confirmation from the DNO themselves that a connection is viable in the specified area is timely and wasteful for developers.
• If this is expected pre-application, then a lot more work needs to be done from the DNO side to ensure data on the status and capacity of their substations is publicly available, up to date, and accurate. Although heat maps for DNOs are readily available, these are generally outdated and inaccurate, and rarely reflect the outcome of the grid offer. DNOs need to allocate the resource to provide in depth pre-application grid support and information.
• As developers, we have not had any communication directly from UKPN, or any other DNOs, informing us of this change other than a slide in the UKPN webinar. Across the board, more effort needs to be taken to keep Developers up to date with these changes and reforms.
• These ENA changes need to be joined up with and aligned with the ongoing ESO reforms. We’re generally supportive of increased application requirements however these need to be realistic and discussed with Developers at consultation prior to their implementation.

We expect:

• ENA must commit to publishing a public consultation on these changes before they are implemented in November.
• Resource to be committed to ensuring up to date publicly accessible grid network data for Developers.
• More clear alignment with ongoing reforms.
• A focus from DNOs on delivering projects with planning permission and land rights.

Open letter on the reformed regulatory framework on connections (ofgem.gov.uk)