Our transition to DSO demands greater flexibility in management of the electricity network to ensure supply and demand are always balanced.
Flexibility services can be provided by households, businesses and communities in our distribution regions, who are paid to flex their demand or supply in response to constraint on our network. Their services could include small-scale renewables, battery storage, electric vehicles, demand side response and energy efficiency measures, to alleviate network constraint.
When an area of constraint has been identified, we can respond by reinforcing the network, or by using flexibility services. To help stakeholders understand how we make this decision and to embed neutrality in this process, we commissioned Frontier Economics to develop a tool that compares the cost of either option and assesses the benefit of optionality.
We use Constraint Managed Zones (CMZs) to identify areas where flexibility could be deployed to help manage the network in preference to traditional reinforcement. We now have several flexibility contracts in operation, which are helping to save money for our customers and reduce carbon emissions. On the Isle of Islay, we are successfully utilising low-carbon energy generation to manage the network. Within the first six months, this project had avoided 2,450 tonnes of CO2 emissions and saved customers £230,000 in the process. We have a significant procurement pipeline for flexibility services in both our licence areas.
Payment for providing flexibility services will commonly consist of an availability payment and/or a utilisation payment and while the values will vary based on service type, market liquidity, geographical location and network need, values will typically be around £150/MW or MWh.
We are seeking to procure flexibility services ahead of need from existing (or potential) flexibility providers.
The role of energy efficiency measures
SSEN has taken an industry-leading step in forecasting energy efficiency uptake in its distribution areas. Energy efficiency will play a key role in meeting net-zero. SSEN is committed to working with the local communities it serves to help them realise their net-zero goals.