Build Back Better - recap of 2020

2020 has been the toughest year most people can remember. During the year we were often asked how our customer base was doing, and whether the economic trauma that spread alongside the pandemic would put any of them at risk. Looking over our list of Energy Partners, I’m struck by how many of them are in essential industries: healthcare, food, data and telecoms, water, community heating, transport and logistics, and others. It hasn’t been an easy year for anyone, but most organisations we work with have nevertheless been busy.

At Flexitricity, we do visit customer sites, for site surveys, commissioning, maintenance, or just a chinwag. All of this had to change in lockdown – the last thing we wanted to do was to bring the virus to someone’s factory gate. We still had to onboard new sites, maintain all services from frequency response to the capacity market on a 24-hour basis, deal with routine issues, and keep the revenue flowing – all with little or no travel.

As a result, we leaned more heavily on our Energy Partners in 2020 than ever before. We pride ourselves in delivering a full service, from initial engineering through operations to monthly settlement. This makes us even more grateful – and we are deeply grateful – for the extra efforts our customers have made during this tough lockdown period, to keep flexibility services running and keep supporting the security of the GB electricity system.

We also had to look after our team. Like everyone, we’ve become accustomed to conducting meetings from kitchens and spare bedrooms. It’s not so straightforward to run a 500MW+ virtual power station in that way. Seeing the writing on the wall, our Operations and IT teams spent the week before lockdown preparing for remote operations. When lockdown was declared, we had already been operating full remote shifts for three days, and we’ve been able to maintain 24 hour operations throughout. This was hard work, and disruptive for the team, but they rose to the challenge and I’m extremely proud of them.

National Grid threw us a fair few challenges during this time, not least the launch of Dynamic Containment – the newest, fastest and most technically challenging frequency response service currently on the books. It’s also proving to be the most lucrative. When the service was first announced, the whole industry declared “that’s for batteries”. This has proved largely true – but it’s a challenge even for those assets. DC is subject to very high quality requirements, for one very good reason: if it disappears, nothing can replace it in time.

DC is about stabilising the system during the first few seconds of a disturbance, particularly in a low inertia system. Lockdown coincided with warm weather and some reasonably windy nights over bank holiday weekends. This produced the lowest net demand, and lowest inertia, that anyone can remember. National Grid ESO always has to keep an eye on whichever power station is the largest generator operating at the time, and determine whether a failure of that unit would knock the system too hard. If it would, then that power station has to be turned down and the energy replaced, sometimes at considerable cost. With DC, the system can tolerate a larger loss. But if DC doesn’t show up when that larger loss occurs, it’s only a short step to a blackout.

Optional Downward Flexibility Management (ODFM) was the other big lockdown-related innovation this year. In context, this is actually National Grid’s third attempt at buying negative reserve from electricity customers since we started nagging them about it (nine years ago!). ODFM is certainly the most successful, and we were able to bring it to a number of our Energy Partners. It’s not without its wrinkles, but we’re hoping to see those ironed out during 2021. It is now clearly established that customers and small generators can flex both ways, and deliver system value when they do so. Will that be done through a revised ODFM? I’m not sure. But one alternative route is already available: Balancing Mechanism Wider Access. In 2020, Flexitricity received the ever first BM Wider Access transaction, which was delivered by Philip Dennis Foodservice. We see BM Wider Access as a major part of a future decarbonised energy system.

So how did decarbonisation fare during 2020? Initially, not well – falling demand reduced emissions, but only temporarily. An early casualty of lockdown was the COP26 Glasgow climate summit, originally scheduled for November this year and now bumped to 2021. Arguably, however, the extra year could have saved the summit – and GB decarbonisation along with it. Starting with Boris Johnson’s Ten-Point Plan, a policy deluge is now in full flow. What’s really interesting is that the 2050 net zero target no longer travels alone. The latest target, 68% reduction by 2030, will lead to substantial policy acceleration right across the energy industry.

The numbers reveal how that will affect us in the near future. Hydrogen and nuclear get big headlines in the ten-point plan, but the cash and the goals are modest. Electric vehicles, insulation, heat pumps and offshore wind are the ones to watch. Some of our Energy Partners operate large vehicle fleets, and are already looking closely about how flexible charging of EVs could save both cash and carbon. During the year, we also heard more stirrings of large-scale heat pumps potentially connecting to district heating networks.

The horrors of 2020 are not quite in the past. But the context which has been set for 2021 and beyond is Build Back Better. Flexible electricity can do a lot here. We’re all going to stay busy.