UK frequency response service suite expands
National Grid introduced Dynamic Regulation (DR) and Dynamic Moderation (DM) in Q2 2022, with both services required to regulate steady-state frequency within the statutory limits. To date, low volumes have cleared (6MW and 90MW per EFA block respectively) at a VWAP of £6.4/MW/h and £26.0/MW/h for DM and DR respectively (equivalent of £56/kW/year and £228/kW/year).
Dynamic Containment High (DCH), introduced back in Nov-21, has seen an increase in average cleared volume per EFA block from 135MW in Nov-21 to 690MW in July-22 to date, partly due to higher summer requirements across DC due to lower demand & inertia.
There is a currently a substantial difference in the clearing price for DCH and DCL. In Nov-21, DCL was clearing on average at 200% the price of DCH, increased to almost 1000% in June-22 where the VWAP for DCL was £38/MW/h (£333/kW/year). Given current market conditions, the cost to counteract a loss of generation (e.g. bringing on additional plant) is significant and therefore pushing up the observed clearing price of DCL.