Enhanced Frequency Response – investing in the future of energy

 

Headline grabbing supply crunches and threats of blackouts have brought the issue of security of supply into sharp focus. Innovative energy technology such as energy battery storage and thermal energy could be transformational for the UK as it tackles the very real threat of blackouts with a guaranteed energy supply available at times of high demand.

The drive to transform our energy industry and underpin supply with secure and constant access to energy is the lifeblood of National Grid’s Enhanced Frequency Response initiative.

Last week the energy body unveiled the eight projects which will for the first time be called upon to provide sub-second response energy at times of high demand in the UK. Such high speed, easy access energy is truly innovative in a world in which fast delivery to date has been secured in no less than under ten seconds.

Now the successful projects have been named, what’s next for the companies at the heart of this energy revolution?

Underscoring the value they can have in the UK’s energy mix, the inaugural EFR process is a big win for new energy technologies such as energy battery storage. Now the contracts have been signed much work needs to be done to get the chosen projects up and running and ready to feed into the grid by the 1 March 2018 deadline.

Indeed some of the successful projects are embryonic with a steady flow of cash required to propel them into the next stage of development. EFR will be crucial for such projects. National Grid will provide a daily payment to each project to be on call for emergency supply with an additional amount paid should the project be called upon in times of high demand. This firmed up regular income gives the successful projects the capital required.

The hard graft can now begin. Preparations can now be ramped up in time for implementation with ordering materials, building developments and carrying out essential testing topping the priority list. Indeed, March 2018 seems like a long way away but for those in the throes of developing this ground breaking energy technology, moving at pace will be vital.

In the short to medium term connection agreements, planning permission and financial close of projects must be secured no later than February next year. No doubt National Grid will be keen to see each project hit this post-tender milestone and demonstrate that progress is well underway.

It’s early days yet but EFR has brought the underlying drivers to investing in energy storage into sharp focus. Talk of keeping the lights on is more than just punchy rhetoric. It’s a challenge we must tackle head on. Bolstering our home grown energy supply and harnessing it more effectively will reduce our reliance on pricy imported energy and will ultimately lower consumer costs.

Embracing the opportunity that EFR provides will be a crucial driving force behind the energy technology of the future.

Pete Feehan is an energy partner at law firm Pinsent Masons

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