The new ‘Balancing Mechanism report’ by UK energy market researcher Cornwall Insight, has found that accepted volumes in the Balancing Mechanism (BM) from identified batteries, gas reciprocating engines, and aggregated units across June – August 2020 have all increased.
Year-on-year, accepted volumes have seen significant rises: batteries volume has risen by 149%, while gas reciprocating engines saw a 338% increase, accepted volumes from aggregated units rose by 518%, and there was a 125% increase from wind.
Cornwall Insight analyst Lee Drummee said: “It is no surprise that the BM experienced a notable increase in activity so far this year, in light of the heightened challenges brought by Covid-19. Even after the lockdown restrictions eased total volumes of accepted actions on the BM, they remained significantly higher in 2020 than in 2019. The total volume of actions across June–August 2020 totalled 9.1 TWh, up 40% on the same three months in 2019.
“However, what is most interesting is the technologies that have been providing these balancing actions to the ESO. Newer asset types such as batteries, gas reciprocating engines, and aggregated units, which are formed up of multiple technology types, have seen the greatest percentage increase in activity.”
In the meantime, the only technology to see a decline in activity for the reviewed three months was coal.
The report has also shown that significant increase of newer technologies can be attributed to several factors, such as the impact of Covid-19 on power demand and greater penetration of wind on the system over this period.
As these newer asset plants become more popular, trading parties are more often investing in the ability to access the BM.
Drummee added: “Virtual Lead Parties (VLP), a new type of BSC Party [company that has acceded to the Balancing and Settlement Code] that can register secondary Balancing Mechanism Units, can participate in the BM without needing to be either a licensed electricity supplier or licensed generator. These VLPs have recently been used for the first time in the BM. We anticipate the activity of these participants to rise in the future as more gain access to the BM via this route.”