National Grid has applied to Ofgem for the recovery of £113m it has committed under two “Black Start” contracts signed with SSE Fiddlers Ferry and Drax power stations in late March this year.
Black Start provisions are incentivised under the Balancing Services Incentive Scheme, a two-year scheme (2015-17) where National Grid is measured against a cost target, receiving a reward/penalty when actual costs are below/above the target. In March 2016, Ofgem issued a mid-scheme update that increased the Black Start target for 2016-17 from £22.35m to a maximum of £34.74m – subsequently National Grid signed the contracts with SSE and Drax.
As a result, National Grid has applied for an adjustment to the incentives under an Income Adjusting Event. IAEs may be granted if the system operator incurs costs that were beyond its reasonable control and were caused by an unforeseen event. National Grid argues in its application that these costs were caused by the unforeseen announcement of closure or mothballing by a number of thermal power stations in February 2016 due to unfavourable market conditions.
Ofgen has launched a market consultation in relation to the IAE application, seeking to determine whether the event qualifies as an IAE, in particular whether it was genuinely unforeseen, and if so whether the costs incurred by National Grid as a result were justified.
What is a Black Start?
While the term “black start” might invoke images of spy films and nefarious activities, it is actually quite mundane. In the same way that car engines require input from a battery-powered electric motor to turn over the engine to get it started, most power stations cannot restart without power, which is usually supplied by the electricity grid. In addition to supplying the power needed to start the turbines, power plants also require electricity to run supporting facilities such as safety equipment, lighting, ventilation, pumps, controls and gauges.
|In the event of a system-wide blackout, power stations would be unable to re-start without an independent power source – the “black start” capability. Typically this involves a small battery that is used to start a diesel generator which provides the input power to re-start the plant as a whole. Hydro-electric power stations are ideal as black-start sites as they require relatively little power to come online, however thermal power stations can also be used.|
Once a power station is running, it can be used to re-energise the transmission network locally, and provide start-up power to nearby power stations. This process is co-ordinated by the system operator, which will direct the reconnection of loads to the system as additional generation is returned to service, to help stabilise the generation and ensure the correct grid frequency is established. As individual islands of balanced generation and load grow, the system operator coordinates their re-synchronisation into the wider network and service is restored to the remaining customer loads.
Co-ordinating this process is complicated as different generators have different minimum and maximum load limits and maximum ramp rates. As the first generators come back online, the system operator must ensure sufficient load is re-connected to keep the units above minimum load limits, without exceeding their generating capabilities, ramping limits, or voltage-control capabilities.