BiTraDER is an innovative project addressing renewable energy curtailment through market-based solutions. By allowing customers to trade their curtailment risk and optimise their position in the merit order, it aims to increase revenue for renewable resource owners and improve grid efficiency. The project is in development and seeks stakeholder input, with the goal of streamlining the transition to sustainable power systems.
Curtailment of renewable power is becoming increasingly common as countries ramp up their efforts to decarbonise their power grids. The issue can affect a broad range of stakeholders, resulting in lost revenue for renewables generators, increasing the costs of meeting decarbonisation targets, inefficient use and management of the grid, and ultimately higher costs for energy consumers. Infrastructure solutions (include large scale storage and grid reinforcement) can be expensive and have long lead times. The BiTraDER project is exploring an innovative solution to avoid curtailment of renewable generation using a market based approach to create revenue opportunities for owners of connected resources. Innovative solutions like BiTraDER offer greater efficiency of current infrastructure and ultimately will reduce the costs of the energy transition.
Currently, developers of new generation sites (e.g. new solar or wind farms) looking to connect to the electricity network are offered non-firm, or curtailable, connections for quicker access at a lower cost, but they run the risk of curtailment from the DNO in cases of excess generation. There is less risk with a firm or ‘non-curtailable’ connection, but there can be much longer waiting times to connect. Customers can also provide a ‘flexible service’ to the DNO by agreeing to increase generation output, or reduce demand, at times when defined by the DNO in exchange for remuneration. However, some customers are hesitant to offer this due to the long-term commitment associated with it.
Many customers, often renewable generators, choose to wait indefinitely for a firm connection, hindering the progress toward net zero goals. BiTraDER is developing and trialling a solution to reduce this barrier.
BiTraDER provides customers the option to trade their curtailment risk with other customers, potentially boosting revenue for customers with non-firm connections. Firm customers can also benefit through an opportunity to participate in flexibility on an ‘ad hoc’ basis, without being tied to long-term contracts.
What would BiTraDER look like in practice?
Electricity North West Limited (ENWL) use a ‘curtailment index’ to determine the order for curtailment, referred to as the ‘merit order’. When a constraint occurs, the network management system works its way down the merit order, curtailing customers until the constraint is resolved. This is shown in the left column in the diagram below; where Party A (a wind farm) will be the first to be curtailed, followed by B and C if necessary.
The diagram provides a summary of a scenario where, through BiTraDER, Party B wishes to reduce its curtailment risk by changing its position in the merit order. Party B trades with Party F (demand turn up) and this exchange allows Party B to move down the merit order and Party F moves to the top, so that it will be on the first on the list for curtailment if a constraint occurs. Note they will only be constrained if a constraint actually occurs in the traded period, this approach only trades the obligation to curtail in those circumstances.
In summary, BiTraDER will allow customers to rearrange the order in which curtailment happens through bilateral trading.
What’s happening next?
The BiTraDER project is currently in full swing, investigating, designing, building the BiTraDER platform, leading to a trial of this innovative marketplace on the ENWL’s network. The team is working hard to make this vision a reality and is eager to involve various customers to ensure the platform aligns with their needs and delivers the best outcomes for customers and the electricity system.
There are a range of different ways to be involved, from online surveys to collaborative workshops. A key upcoming engagement activity is the ‘mini trials’ early next year which will provide an opportunity to test different design elements, such as payment structures, ahead of the simulated trials later next year.
So if you are involved in the development, management or ownership of assets connected to the distribution grid, i.e. a network customer, with a curtailable or non-curtailable connection, and you would like to be involved in shaping this project to ensure the BiTraDER platform can deliver the best opportunity for your business, please get in touch at BiTraDER@lcp.com or email@example.com.
More information on the BiTraDER project, including outputs from LCP Delta and the rest of the BiTraDER project team, Electron and AFRY, can be found on ENWL’s website.