Anesco and Western Power Distribution have struck a flexible capacity agreement that they claim is the first of its kind.
Anesco said the arrangement, which will see it relinquish some import capacity on its 19.5MW connection at peak times, will cut its grid charges by around 25 per cent.
“This agreement is different to existing flexible agreements including WPD’s Flexible Power arrangements,” said a WPD spokesperson. “It falls under a different charging methodology which has been available but not used previously by any customers. This is the first time WPD has signed such an agreement with a customer.”
While distribution network operators are ramping up procurement of flexibility to manage network constraints, some industry participants believe there is greater value to be had from flexible connections, given the multibillion pound reinforcement programme that DNOs must undertake if the UK is to meet net zero ambitions.
Incremental revenue from providing distribution grid services gives investors short-term price signals and optionality. But opening up flexible connections and access across the UK market that reflects the value of avoided cost could provide the long-term price signals investors require to start putting serious money into flexible assets, such as batteries, or unlocking flexible load.
Network access arrangements are a large part of Ofgem’s significant code review.