The National Energy System Operator (NESO) is finalising plans to pay fees to battery owners who will react to calls to either charge or discharge their batteries for periods of less than five minutes.
NESO says the new so-called ‘Positive Quick Reserve’ and ‘Negative Quick Reserve’ options will reduce costs to consumers, while providing revenue to battery owners. The service will also shorten ‘imbalances’ in electricity supply and reduce the likelihood of faults propagating across the electricity system.
Reserve is needed to manage the electricity supply frequency when there is an imbalance between supply of energy and demand in the electricity grid. When instantaneous supply is not enough to meet demand, the grid frequency falls below its usual frequency of 50Hz. Where supply outstrips demand, the frequency rises. Additional generation or demand is needed to re-establish the balance. NESO says Positive Quick Reserve (PQR) and Negative Quick Reserve (NQR) form part of a suite of new Reserve products which it is developing to manage this.
Quick Reserve is open to any technology with the ability to react at the speed required, but most response is expected to come from batteries.
Participants will bid to offer the service either day-ahead or within the same day. They will bid to be available for specific thirty minute windows and winning bidders will be paid an ‘availability’ fee for each window in which they provide the service.
They may not be called on during the 30-minute window. If they are called, they will have to react immediately, and ‘ramp up’ charging or discharging, or interrupt charging or discharging, within one minute. They will operate as directed by NESO for up to five minutes and then return to normal operation. They may be called on again within the 30 minute window after a ‘rest time’ of three minutes. Each time they are called they will be paid an ‘activation’ fee according to their auction bid.
Participants will have to offer a net change in demand or generation of at least 1MW, but because this is measured at the relevant ‘grid supply point’ that does not mean they need to have a single battery of this capacity. Bids could come from a site with a fleet of batteries so that the owner could manage which participate. Alternatively, a specialist ‘aggregator’ could be the participant and contract with third party batteries across the area to react.
The Quick Reserve service was trialled for the first time last winter. NESO has been consulting on the final form of the enduring service since January and it expects energy regulator Ofgem to decide whether to give the go-ahead to the finalised service towards the end of June. If it is approved, NESO plans to open bidding in the middle of July, with the first operational day around the end of July.
NESO contracts for other services that may be served by batteries or assets with other characteristics. For example, it is finalising ‘Slow Reserve’ (both positive and negative) which will have a 15-minute period to react, and will require the participants to continue their requested action (charging or discharging, import or export of power) for two hours. Slow Reserve is expected to replace current products at the end of 2025.
