Enhanced Frequency Response tender

Enhanced Frequency Response (ERP) tender results

The results of National Grid’s (NG’s) first Enhanced Frequency Response (EFR) tender has brought forward investment in 8 battery storage facilities in the UK.

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Enhanced Frequency Response ERP tender

EFR tender results

The year long auction process secured 201 MW of capacity at prices between £7 and £11.97 / MW / hr, at a total cost of £65.95 million over the 4 years. We note that:

  • The auction was highly competitive and tender clearing prices were significantly lower than anticipated given the technology cost, as illustrated average1 bid price of £20.20 / MW / hr; 
  • There was an overwhelming response from the market for the more valued service to National Grid, Service 22, which allows NG to control frequency deviations pre-fault;
  • The c.1.2 GW of unsuccessful capacity clearly indicates the market’s appetite and readiness for investment in fast response technologies; and
  • Given the change in market dynamics, resulting from generation mix changes and its impact on the costs of system balancing, we expect requirement for fast response to control frequency variations will increase in the future.

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