Scottish Power Energy Networks (SPEN) has launched its biggest ever call for flexibility services at 40 locations across the UK. The 900MW call sends a major statement of intent to the demand-side flexibility market.
The distribution network operator (DNO) aims to procure up to 650MW of flexibility between April 2023 and March 2028 plus 288MW for 1,038 low-voltage sites via long-and short-term contracts. It is targeting sites where demand is likely to increase from electrification of transport and heat.
Pre-qualification started this week and ends 9th October, with bidding due to open on 26th October and close four days later. Contracts are scheduled to be awarded in December.
DNOs have been moving towards smarter, more flexible networks for the past couple of years, but are now ramping up in earnest, with Ofgem keen to see evidence of flex becoming ‘business as usual’ ahead of the next price control, where it appears set to aggressively slash allowed profits.
“We need to get to the end of this year having seen changes come into play, having seen better co-ordination [between networks]. Because at the end of the year, DNOs need to think about business plans,” stated Louise van Rensberg, interim deputy director, energy systems transition at Ofgem at the start of 2020.
“You can’t build a business plan if you don’t know how you are going to value flexibility, or compare flexibility to other network solutions. So [embedding flexibility] is a very important part of those business plans … and I can’t stress enough, this is a big year in this space and we must achieve progress.”
By April 2020, DNOs had committed to procure around 2GW of flex by the end of 2020. In a world of 4 per cent returns for monopolies, it appears likely that flexibility, where generators, aggregators and energy storage providers are paid to alleviate congestion and enable networks to run closer to their limits, will become the go-to option for DNOs over traditional capex-based reinforcement methods like new cables and substations.
Scottish Power will work with flex marketplace Piclo on the tenders, with whom it has been working for the last two years.
“Flexibility has a critical role to play … we’re now taking it to a far larger scale,” said Graham Campbell, head of Distribution System Operation at SP Energy Networks.