Looking at 2020 and beyond, constraints costs in the Balancing Mechanism continue to rise over time in line with growth in renewable deployment (see graph). According to Cornwall Insight, “this is unsurprising given the growth in renewable deployment and the predominance of onshore wind being deployed in Scotland.”
Managing grid constraints
Today, grid bottlenecks are handled by matching bids (to reduce output) and offers (to increase output). Considering the dominance of wind power supply in Scotland, the current grid constraints occasionally forces National Grid ask some wind farms to turn down against some compensation.
In the long run, it would be prudent and more sustainable, to fully utilize Britain’s wind power potential by building additional power transmission line. According to Cornwall Insight, network reinforcement is costly but vital, especially in the Cheviot Boundary area between northern England and Scotland.
National Grid’s new constraint pathfinder’s first project is looking for at least 200MW with a 2 hour duration to manage the flows between Scotland and England, which currently ranges between £100-200mn a year from Balancing Mechanism actions alone.
Contrasting two ways of cost-sharing
GB policy for transmission connections still remains as ‘Connect and Manage’, in which generators who wish to connect to the system have a fixed date for receiving Transmission Entry Capacity. Hereby, the cost for grid expansion and reinforcement are shared by all network users.
In contrast, under the previous ‘Invest and Connect’ approach, the grid connection cost had to be paid by the parties contributing to the problem. This more straight-forward approached has allowed the UK to meet the 20 percent by 2020 renewables target, and analysts say it would help to reach the Net-Zero target.
A positive example is the Western High Voltage Direct Current (HVDC) link between Western Scotland (Hunterston) and North Wales (Flintshire Bridge), at a total of 2.2GW – the so-called ‘Western Boostrap’. The project underwent significant pre-planning and environmental and marine studies necessary to obtain necessary licences, with construction starting in 2013 and commissioning completed in 2018.
“Despite some reliability issues, it is a good example of managing connections while limiting the costs of constraints,” analysts concluded.