RIIO-2: Ofgem consults on tougher price controls for networks

Last week Ofgem has published its consultation for the next round of price controls for energy networks, known as RIIO-2. RIIO-1 had been strongly criticised for allowing network companies to generate above average levels of returns on businesses that are seen to be less risky than the wider economy. Network companies have been earning returns…

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Political dispute in the Balkans causes electricity system frequency deviation across Europe

I have written several times about the challenges facing system operators as the energy transition sees increasing amounts of intermittent generation increasing frequency variation. However, between mid-January and early March, there was a persistent frequency deviation that caused clocks to lose time across the 25 countries connected to central Europe’s synchronous electricity system that had…

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Responding to the challenges of transmission system transformation

Last week, National Grid outlined its plans for it system operator business, following the decision by Ofgem last year that greater separation of this activity was needed from the rest of the National Grid business in order to better manage conflicts of interest. “Our long-term vision is for an Electricity System Operator (ESO) that thinks…

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Updating frequency control and reserve markets

In December, National Grid published a new roadmap for its frequency control and reserve markets, setting out the principles which are to govern the development of balancing services products with a view to providing greater clarity and investor certainty. Described in more detail below, the changes are designed to simplify the procurement process and allow…

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Is it time to look differently at security of supply?

National Grid’s outlook for the coming winter is somewhat more positive in capacity terms than in previous winters, with a capacity margin of 6.2 GW or 10.3%. “We are confident that we have the right products and strategy in place to help us to balance the system, even under colder conditions than we have experienced…

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Incremental balancing services reform announced – more is to come

Last week, National Grid announced a rationalisation of its frequency response balancing services as part of its wider review of the needs of the electricity system. As the electricity system becomes more decentralised with an increasing contribution from intermittent sources of generation, the traditional methods of balancing the system and controlling system frequency are increasingly…

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Using artificial intelligence and machine learning to manage the electricity grids of the future

Existing power grids were designed to transmit electricity over relatively short distances, however, increasingly grids are required to supply major cities from remote offshore wind farms at the same time as integrating local generation. With generators feeding variable amounts of energy from renewable sources into the grid at all voltage levels, it is more difficult…

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RIIO reform: current regime too generous to network companies

On the 12th July, Ofgem issued an open letter launching the process for establishing the next round of price controls, known as “RIIO-2”, for the GB gas and electricity systems. These price controls determine the amount of allowable expenditure for network companies (which includes owners and operators of the transmission and distribution networks) and the…

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