Distributed generation forced to provide Balancing Market data to join Capacity Market in future – respond to consultation

Distributed generation will have to be registered to take part in Balancing Market (BM) in order to take part in the Capacity Market, under new proposals from BEIS, and notify the system operator of plant ‘market position’ in every half-hour dispatch period. Although this could present a barrier to such small plant entering the Capacity Market, BEIS says it wants to implement the change before prequalification begins for the 2022 auction, to meet “the pressing need to improve the visibility of capacity by NGESO”.

NGESO regards the BM as GB’s core flexibility market, says BEIS. CM plant are nominally expected to be a BM unit (and a party to the Balancing and Settlement Code) but a “significant portion” of distribution connected capacity is exempt. “This can create serious issues for NGESO in understanding the true amount of capacity available to it to manage the electricity system,” says BEIS, and “potentially results in inefficient scheduling and dispatch of units” raising prices.

BES acknowledges that it has been difficult for distributed generation to participate in the BM in the past, but says NGESO’s new scheduling IT, new telecoms and the ability to participate indirectly via a ‘virtual lead party’ have alleviated that problem. Recognising that the  proposal is “a significant change” for some parties it wants to to hear from the industry by 16 April as to whether the change can be made this year.

Carbon emissions

BEIS is also considering the rules for thermal plant around carbon emissions. This was prompted by information that one plant would be bidding a plant with carbon capture and storage in the auction.

BEIS proposes to discount the carbon captured from registered emissions. Meanwhile it has proposed new rules for plant burning mixed fuels. Previously it registered emissions from the main fuel only, but now – partly in preparation for plant co-firing with hydrogen – it proposes new ‘fuel share’ rules covering all elements of the fuel.

Trading capacity

BEIS has also proposed new rules around trading all or part of a CM unit’s obligation, especially in the event that plant is closed or quits the market prematurely. The consultation also includes some relatively minor changes including allowing the delivery body more leeway to allow for minor corrections and updates in the prequalification procedure. This previously required an appeal to Ofgem.

The consultation closes on 16 April. Find it here

Further reading


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