System Operator warns no more firm reserve or STOR procurement as it mulls day-ahead products

System operator NGESO has said it will not procure more firm fast reserve in its current form. Nor does it expect to procure firm short term operating reserve (STOR), this year or next. The ESO plans to use other services instead, while it develops new replacement products.

On fast reserve, the ESO said it wanted to develop new standardised products that could be procured on a day-ahead basis (which was not possible with firm fast reserve). It said a survey of providers had found that 83% were interested in moving to day ahead procurement and 53% could do so immediately. Another 23% could move within 6-12 months. Providers felt the change was likely to allow for more flexibility, better liquidity and more market-reflective pricing, NGESO said, but there were concerns about making the change including interactions between the ESO and provider systems, qualification and the cost of participation.

The system operator said it was focusing STOR efforts on making the existing product compliant with the EU requirements, whilst also looking at how this product fits with our future standardised requirements. It said “We will continue to operate with existing contracts and the optional STOR service. Should we need to procure any firm STOR during early 2021, as we transition to day ahead procurement, then we will ensure we announce this in good time.”

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