DNO Flexibility Procurement

DNOs use different products to manage flexibility needs on the network. Historically, the four main types of products used are:

• Secure: pre-emptive management of peak demand on the network

• Sustain: pre-emptive management of peak demand on the network where provision of services are scheduled and fixed at the point of contract at fixed delivery periods

• Dynamic: to address planned fault conditions such as maintenance works

• Restore: to revive the network in the case of rare conditions such as extreme weather events

The graph below shows total tendered, contracted and dispatched capacity of projects by each product type across all DNOs, allowing the viewer to see which products are most popular for each DNO.

As we see in the graph, different DNOs have experienced different flexibility needs. For instance, UK Power Networks has tendered for 753 MW of dynamic flexibility products, and ended up contracting 1.6 GW with 1 GWh dispatched during the last reporting year (2022/23). The prevalence of dynamic products in comparison to other products could suggest that deploying flexibility as part of forward planning for maintenance works makes up most of the DNOs' flexibility needs. However, in reality, this product is mainly being used to manage demand constraints on the network, despite the official definition of dynamic products. This highlights the nuance and variability of how DNOs engage with flexibility procurement mechanisms to suit their network needs.

National Grid Energy Networks, in contrast, has tendered extensively for dynamic (480 MW) and restore (635 MW) products, but during the reporting year (2022/23) ended up dispatching more secure products (997 MWh). Around 740 MWh of dynamic assets were also dispatched, reflecting a need for flexible assets during planned outages on the network. Interestingly, 1 GWh of secure assets were dispatched, whereas only 155 MW were tendered and 50 MW contracted.

In 2022/23, no restore products were dispatched, indicating that no unplanned outage events occurred, compared to 1,700 MWh of dispatched restore products in the 2021/22 reporting year. 

click below to expand the next section

The ENA highlights that 70% of contracted flexibility is made up of solar, biofuel and stored energy. However, less than 45% of electricity dispatched for demand constraints can be classified as low carbon, of which 76% were from biofuels. No solar assets have been dispatched to date.

How much is being dispatched over time? Some DNOs have dispatched more flexible assets than others. NGED, UKPN and SSEN have been relatively active compared to SPEN and NPG, DNOs which have experienced less immediate need for flexibility. This suggests diverging strategies towards flexibility, with these DNOs possibly seeing a reduced need for flexibility due to increased investment in network reinforcement.

In the graph below, we see that most DNOs have increased dispatch volumes as each reporting year goes on. SSEN, however, saw more dispatch occurring in 2021/22, mainly due to generation constraints. This highlights the opportunity for investment in hydrogen co-location to capture energy that otherwise is lost during periods of relatively low demand on the network.

What times of the year see most dispatch occurring per product and technology? Periods of peak demand occur in the winter months, while summer months lead to periods of excess solar and decreased demand. Restore projects are dispatched most often in the spring and summer months, almost exclusively by SSEN. Dynamic dispatch is consistent across seasons, but has been growing in dispatch volume in recent months. This is matched by a near equal amount of dispatch growth from Secure and Sustain products from September 2022 onwards.

What types of technologies are being dispatched per product? The types of technologies dispatched by DNO depend on the assets available in their geographical region as well as the type of constraint being addressed. By filtering the two below graphs to the same DNO side by side, we can infer the technologies being used for each product type.

For instance, NGED relies heavily on biofuels for dynamic constraint management. SSEN on the other hand, has almost exclusively managed generation constraints by reducing wind and hydropower load on the network through products like restore to manage post-fault, generation constraints.

The sunburst chart below allows us to understand the types of technologies being used for each product type.

Fossil fuels are used for secure and dynamic products, offering quick dispatchable power. A small amount has also been used in Restore circumstances, to restore power to a network following an outage.

Hydropower is mainly turned down as restore in post-fault generation constraint events, although a small amount was used as a secure product.

Wind, similarly to hydropower, is used almost exclusively for post-fault generation constraints, but can also be used in sustain services. This highlights how intermittent power supply sources can be called upon to manage peak demand.

Biofuels, mainly made up of biodiesel, have been used for sustain and secure products, and make up the largest single source of dispatched dynamic products. This is due to the availability and dispatchability of biofuels and the preference for biofuels over traditional fossil fuels.

Demand turndown is most used for dynamic products as well as secure products. This can be a useful option to avoid increasing generation through biofuel or fossil fuel assets, during times of demand constraint.

Stored Energy has been used in secure and dynamic products, much like demand turndown, fossil fuels and biofuels.

What types of technologies are being dispatched per constraint type? Each technology is called to address certain types of constraints, which are managed by the types of products available for each constraint type. Renewable technologies, such as wind or hydro, are often used to address generation constraints, meaning they are turned down during periods of excess generation on the system. Energy storage, biofuels and fossil sources are used to address demand constraints on the system, while demand customers are sometimes turned down.