Scheduled utilisation
Introduction
A homeowner is looking to participate in the flexibility services market by reducing their electricity demand during peak hours, providing additional capacity to help manage network constraints.
An aggregator is also looking to provide flexibility services to Electricity North West by reducing the electricity demand of its portfolio during peak hours in accordance with a schedule.
About flexibility services
When the demand for electricity is greater than the amount that Electricity North West can provide, we procure flexibility services to alleviate constraints on our network during peak times. These services are provided by companies or individual customers known as flexibility services providers (FSPs), who own assets in our region such as generators, battery storage and electric vehicle (EV) charge points. FSPs should be able to generate more, or use less, electricity during a pre-agreed service delivery window, and provide at least 10kW of flexibility capacity either individually or via an aggregator. This allows us to balance supply and demand, ensuring a safe and reliable supply of energy for our customers. In return for providing extra capacity, FSPs receive payment from Electricity North West.
Delivering a demand reduction service via Scheduled Utilisation
Homeowners can participate in Demand Response flexibility services using a number of their assets, such as EV charge points, heat pumps, adjustable thermostats, air conditioning, smart appliances, batteries, etc. These are processes and assets whose electricity demand can be adjusted for short periods with no impact on the homeowner's day-to-day operations. In this example, the homeowner has a heat pump, an EV charge point and adjustable thermostats for the boiler and heating installed at their house which they can control to manage the house’s total demand profile as and when required.
As the maximum volume of flexibility that the homeowner can offer is below 10kW, which is the minimum capacity required to participate individually in our flexibility services, they decide to participate via an aggregator.
An aggregator is a company that essentially pools smaller assets into a portfolio which then allows them to participate in flexibility service products with higher entry thresholds (e.g. ≥10kW). For example, an aggregator's portfolio could be 1,000 EVs or 200 household heat pumps. The aggregator monitors when the price of electricity is high and then disconnects the pre-agreed demand of the consumers in their portfolio, or similarly increases their demand when electricity prices are low.
Pre-tender
Our tenders are published on the ElectronConnect platform twice a year in spring and autumn in line with our Network Development Plan (NDP) and Distribution Future Electricity Scenarios (DFES) publications to reflect our latest network requirements. To be notified of our upcoming tenders, the aggregator signs up to our flexibility mailing list.
Before the launch of the tender, the homeowner:
- Will carry out market research for potential aggregators to identify the best demand response programmes for their house. During consultations, aggregators typically help potential customers establish how much flexibility their site is able to offer, which services are the best fit, and how much they can earn.
- Registers their house onto an aggregator’s platform, submitting the relevant information.
- Where applicable, the aggregator’s engineering team will likely carry out a site visit and an engineering assessment and will install and commission any additional metering and control systems required to participate in the chosen demand response programmes.
(the above steps are indicative and may differ among aggregators).
Before the launch of the tender, the aggregator:
- Registers the company on ElectronConnect to pre-qualify to participate. The information submitted such as credit checks and insurance details is assessed by Electricity North West. Once approved, the company's commercial qualification remains valid for future tender rounds.
- The aggregator then registers and pre-qualifies the portfolio of assets (including the homeowner’s) they wish to put forward in the competition.
- Electricity North West utilises the Standard Flexibility Services Agreement developed by the Energy Networks Association with the aggregator. The homeowner does not sign a direct agreement with Electricity North West; they will sign an agreement with the aggregator.
Tender process
Pre-qualification
Once the Invitation to Tender (ITT) has been published, the aggregator reviews the network's flexibility service requirements using the map included in our latest flexibility service requirement. Once it has established that its sites are located within a requirement zone seeking a Scheduled Utilisation service, it calculates how much of the required demand response it can offer, when, and at what price. Before submitting a bid, the aggregator uses the cost calculator tool on our website to check that the prices it is prepared to offer for availability and utilisation don't exceed the ceiling price that we are offering for the service as part of this tender round. The cost calculator can be found in the ITT appendices for our latest flexibility services requirement. At this point, the aggregator decides it would like to participate in the tender.
The next step for the aggregator is to complete technical qualification on ElectronConnect by confirming the assets it wishes to put forward in the competition. Electricity North West then validates where the assets are connected to the network and that they are eligible to participate, and assesses the technical details of the participating assets and the capability for delivery. The aggregator is notified via ElectronConnect that the portfolio of assets meets the requirements of the tender, allowing them to move to the bidding stage of the process.
The aggregator notifies the homeowner that their house is eligible to participate.
Submitting a bid
For the final stage of the procurement process, the aggregator submits a bid to the tender via the Electron Connect platform. This is carried out by linking the pre-registered assets to the peak reduction product, as well as the periods where the assets in its portfolio can be utilised to reduce demand peaks. Once the bidding window has closed, Electricity North West assesses the tender responses before accepting or rejecting bids based on the proposed payment and the assets’ ability to meet the specification. If the aggregator’s bids are successful, it will then enter into a flexibility services agreement with Electricity North West to deliver the service within the required service windows.
Helpful tips to consider before submitting a bid
- When calculating the tender bid prices the homeowner/aggregator should consider the cost of lost revenues, fuel costs, environmental or permit fees, initial set up costs, maintenance, other revenue streams available, energy savings benefits etc.
- When thinking about the service windows the homeowner/aggregator should consider the practicalities of these service periods, the processes required to ensure that the service can be delivered, seasonal considerations e.g. increased demand during football matches, Christmas period, weather-related issues (e.g. extreme cold weather increasing the heating demand) and maintenance periods.
Flexibility service products
Electricity North West procures four common products (services), which align with the Open Networks service definitions:
- Peak Reduction
- Scheduled Utilisation
- Operational Utilisation
- Operational Utilisation & Variable Availability.
The Scheduled Utilisation product is a pre-fault product that seeks a reduction in peak power utilised over time but particularly during high peak periods and in accordance with a schedule. Participants in this service are required to reduce their demand below their baseline by a pre-defined number of MW during pre-scheduled service windows (typically at peak times, e.g. 4pm-8pm). This could be achieved by demand turn-down, load shifting or generation turn-up. This helps spread the customer's energy use throughout the day and allows us to operate our equipment more efficiently and release additional capacity to the network for new connections.
Dispatch
Utilisation instruction timings are agreed at time of trade so the aggregator (and the homeowner) can pre-schedule utilisation with the assets.
Worked example 1: Aggregator
An aggregator has entered into a flexibility services agreement with Electricity North West to reduce the peak demand of its portfolio of assets during a pre-determined period under a Scheduled Utilisation service. The normal electricity demand from that portfolio is 5MW and operates 24/7. Under the contract with Electricity North West, the aggregator has committed to reduce the portfolio’s maximum electricity demand by 1MW, between 4pm-8pm, on weekdays between November-March.
If the aggregator manages to prove that the portfolio’s demand was reduced by 1MW below the pre-agreed baseline of 5MW during this period, it will get paid for 1MW of service x four hours per day x five days per week = 20MWh per week.
Electricity North West will not provide a dispatch command to the aggregator. It is expected that the aggregator will reduce its peak demand by 1MW below the contracted baseline during the determined service windows. Outside of these service windows, the aggregator is free to operate its portfolio of assets as it wishes.
Worked example 2: Homeowner
A homeowner has entered into a flexibility services agreement with an aggregator to reduce the peak demand of their house during peak times. The normal peak electricity demand from the house is 9kW. Under the contract with the aggregator, the homeowner has committed to responding to the aggregator’s dispatch signals for demand reduction by reducing their peak demand by 3kW compared to the baseline, between 4pm-8pm, on weekdays between November-March.
Aggregators can either directly control the customer's assets to allow for optimum demand reduction during an event, or dispatch signals to allow the customer to perform control. This should be determined in the contract between the homeowner and the aggregator.
At the end of each month (or as determined within the contract between the homeowner and the aggregator), the aggregator will review the homeowner’s metering data to calculate actual demand reduction during the pre-agreed period. The homeowner will receive payment from the aggregator on successful delivery of services, i.e. for responding to the aggregator’s demand reduction requests.
If the homeowner successfully manages to reduce their demand by 3kW compared to the baseline during this period, they will get paid by the aggregator for 3kW of service x four hours per day x five days per week = 60kWh per week. Outside of this peak period, the homeowner is free to operate their assets as they wish.
Baselining
A baseline is a reference used to measure the amount of flexible capacity delivered to the network by FSPs. There are different kinds of baselining methodologies used depending on the type of asset and service being provided. These include historical baselines (using past meter readings to estimate the baseline using standard algorithms) and nominated baselines (using other forecasting techniques such as weather-based models to estimate the future baseline). The baselining methodology will be agreed between Electricity North West and the aggregator post contract award and at least six months before the first utilisation period. More information on the different types of baselining methodologies can be found on our FAQs page.
Invoicing
Subject to the delivery of flexibility services, the aggregator will invoice Electricity North West and will receive payment by bulk electronic clearing (BACS) by the end of the following month (after the invoice is received).
It is noted that:
- Over-delivery is not paid and cannot be used to compensate for under-delivery during another dispatch request.
For aggregators, more details on invoicing and payment can be found in the terms and conditions of each Invitation to Tender. For homeowners, these details should be found in the terms and conditions of their agreement with the aggregator.
Useful links
Register for updates
Sign up to our flexibility services mailing list to find out about new requirements and receive invites to our events.
Get in touch
If you would like to leave feedback, book a meeting with a member of our team or if you have any questions about flexibility services, please get in touch.