Distribution Network Operator (DNO) Northern Powergrid has announced plans for a flexibility auction - covering generation, storage and demand-side response - using an e-auction platform and a "dynamic purchasing" methodology.
Instead of submitting bids, the "Dutch reverse auction" system raises the price Northern Powergrid is prepared to pay incrementally, at set time period. Bidders can place their bids when the price level reaches their expectations.
Northern Powergrid, the DNO for North East, Yorkshire and northern Lincolnshire, is looking to procure flexibility for network resilience from customer-led assets across its patch.
The scheme, named Restore Flexibility, will help the DNO manage the network on the rare occasions when it experiences network faults.
In the event of issues, customers may be able to provide flexibility, for instance by shifting their energy consumption temporarily or flexing their generation assets after receiving an instruction from the DNO.
An example might be a supermarket chain that can switch off its storage freezers for half an hour if required by the DNO.
With increasing numbers of councils across our patch declaring a climate emergency, we are eager to build a system that can support a fully decarbonised power sector
Jim Cardwell, Northern Powergrid
Northern Powergrid is also interested to hear from factories that can engage in demand side response, generators (minimum 100kW), aggregators of smaller assets, and storage operators.
In return the customer would get paid a price/MWh, as set in the e-auction process.
The exercise will see firms across seven key locations in the region bid to provide flexibility, with the aim of procuring up to 100MW of capacity across these locations.
Andrew McKenna, commercial development manager at Northern Powergrid, said: "On the occasion where utilising customer flexibility is inherently cheaper than the counter factual action, we will look to take this action.
"This means that not only do customers with assets benefit from a new revenue stream, but every single customer benefits financially from the DNO achieving the same outcome through a more cost effective method.
Jim Cardwell, head of policy development at Northern Powergrid, added: "With increasing numbers of councils across our patch declaring a climate emergency, we are eager to build a system that can support a fully decarbonised power sector while ensuring we provide the best possible service at the best possible price for every single member of our community.
"Actions like flexibility procurement for network resilience are crucial to this and empower our customers to play a more active role in network management."
The seven locations in the auction are: St Andrews Road (Huddersfield), Staygate (West Yorkshire), Wold Newton (East Yorkshire), Featherstone (West Yorkshire), Greatham (County Durham), Denwick (Northumberland) and Guisborough (North Yorkshire).
Prospective providers with assets in the named locations to register can register to participate in the Dynamic Purchasing System, by clicking on this link for Northern Powergrid's e-Tendering portal, and selecting "opportunities".
When a final contract has been awarded, the successful bidders will enter a pool of assets that can be instructed to turn up (generators) or down (demand side response) to support a stable power supply in the region.
The procurement approach follow Northern Powergrid's launch of its updated approach to future network management in its Distribution System Operator (DSO) v1.1 document, which highlighted that regional electricity generation capacity in Yorkshire and the North East had quadrupled in the last 10 years to reach more than 4GW - more than Hinkley Point C's intended capacity of 3.3GW.