UK grid's inertia management 'distorts wholesale markets'

London — The UK's National Grid is sailing "a little too close to the wind" in its management of frequency control, with its use of interconnectors in this process distorting wholesale power markets, Limejump's head of trading Rob Sherwood said Friday.

In comments published on the energy aggregator's website, Sherwood said National Grid's options for dealing with sudden dips in frequency, one of which caused August 9's massive blackout across much of England and Wales, are limited.

The preferred stop-gap solution is to increase system inertia (provided by large spinning turbines that can cushion frequency dips) by trading back imported power on the UK's interconnectors to continental Europe.

This pulls more conventional UK generation into the market rather than importing cheaper (and generally cleaner) power from Europe, Sherwood said.

"This not only raises obvious market efficiency questions but also potentially increases UK emissions. This is especially prescient given the prospect of a no-deal Brexit scenario," he said.

Reducing import volume on interconnectors has a two-fold effect: it reduces the risk of the automatic tripping of relays on distributed generation (this took 500 MW offline August 9) and allows more synchronous stations (generally gas- or coal-fired) to generate.

"This means the UK consumer is paying for more synchronous (and potentially dirty) generation and selling this power to Europe. Basically, the power element is flowing to Europe, and we are left with carbon emissions and inertia," Sherwood said.

If the UK joins continental Europe's XBID continuous intraday implicit market, this will no longer be an option.

For now, however, National Grid could force flows that go against the wholesale market spread -- "when it would be cheaper to buy power in France, we are instead selling more power to them just so we can increase inertia," Sherwood said.

The solution is a new UK market for inertia, he said.

"This market would allow wholesale prices to react to true supply and demand fundamentals, without the interaction with system security measures such as inertia," he said.

There are lots of companies in a position to support development of a UK inertia market, but it is down to National Grid to make the first move, he said.

Limejump, which manages a "virtual power plant" of batteries, small generators and demand response sites, providing dynamic and static frequency response as well as being active in the balancing and wholesale markets, is one such company.

"We see an encouraging 200-400 MW of storage in development that we are working with," Limejump spokesman Joshua Greedy told S&P Global Platts.

"These assets will strengthen National Grid and the UK's resilience to these types of events, removing the need to rely on singular asset types and avoiding such impact if assets stop working," he said.

-- Henry Edwardes-Evans, henry.edwardes-evans@spglobal.com

-- Edited by Alisdair Bowles, alisdair.bowles@spglobal.com