Centrica has announced a key milestone in its mission to build a cloud-enabled local energy market (LEM) for Cornwall, after both Western Power Distribution - in its role as a Distribution System Operator (DSO) - and the National Grid ESO procured flexibility through the online portal.
The LEM programme, part funded by the European Regional Development Fund, and delivered by Centrica Business Solutions, has been operating since 2017.
Under the scheme, solar and battery systems have been installed in 100 homes across Cornwall.
In addition, more than 125 Cornish businesses, including Carbis Bay Hotel and Goonhilly Earth Station, a large radiocommunications facility, have had a range of flexible, low carbon energy technologies and monitoring equipment installed.
The LEM cloud-based platform provides a mechanism for these participants to sell flexibility to the network and grid, and for the system operators to indicate when they will need an increase or decrease in generation or consumption to balance the grid or manage a local network constraint.
The homes and businesses on the LEM are offered financial rewards, creating significant opportunities for energy users can be flexible with their usage or deploy smart energy storage solutions.
The buyers (WPD and National Grid ESO) place bids for flexibility services, which are then matched with offers by sellers (homes and businesses) through auctions that run from months ahead all the way to intraday.
The platform manages the process for both sides from contract creation to baselining and settlement, making it easy to trade flexibility.
The LEM online platform uses a clearing engine built by N-SIDE, a Belgian advanced analytics company.
The engine takes bids and offers and finds the optimal clearing solution, taking into account grid and asset constraints to ensure feasible contracts.
This phase enables Distribution Network Operators and National Grid ESO to purchase flexibility services from the same pool of resources but also introduces checks to make sure our respective services don't counteract or interfere with each other
Jenny Woodruff, project manager, WPD
The LEM portal and clearing engine also enables the networks to co-ordinate their procurement to avoid conflicting signals. Centrica argues that this combination of co-ordination and grid-secure contracts will be key to unlocking flexibility from Distributed Energy Resources in the future.
The LEM should also help to make energy markets more efficient and reduce the costs of accommodating further distributed renewable generation across the network, it says.
Pieter-Jan Mermans, director of optimisation at Centrica Business Solutions, said: "This is a milestone moment for the energy network and comes as the result of several years of hard work by the team at Centrica and as well as our partners at National Grid ESO, WPD, N-SIDE, Exeter University and Imperial College London.
"Improving grid flexibility benefits everyone from generators to consumers, and these trials represent a major step forward.
"We are hugely grateful to the householders and businesses across Cornwall who have embraced this trial with open arms, and we look forward to providing a full update after the trials conclude in spring 2020."
Colm Murphy, electricity market change development manager at National Grid ESO, said:
"Exploring the provision of flexibility through a local energy market is a first for us and even though we're in the early stages of the trial, we're looking forward to evaluating the results.
"In particular we're keen to understand how flexibility can be procured efficiently and cost effectively between different markets. The potential is really exciting as we look to unlock more flexible energy resources in the market, and greater cost benefits to consumers."
Jenny Woodruff, project manager for WPD, said: "This phase enables Distribution Network Operators and National Grid ESO to purchase flexibility services from the same pool of resources but also introduces checks to make sure our respective services don't counteract or interfere with each other. This is expected to be increasingly important as we plan to make increasing use of flexibility services, which in turn raises the chances of conflicts occurring.
"It's potentially a significant problem, so this trial is an exciting step to find a solution. It also allows us to find out how flexibility providers behave in marketplaces that have different rules and processes. We're keen to encourage new players to join the market so finding out what they like and dislike will be useful in shaping future markets."