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1、Winter Review and ConsultationJune 2022Helping to inform the electricity industry,reflect on last winter and prepare for the winter ahead.SectionPageWelcome2Key Messages3Margins4-10Triad Avoidance11Electricity Supply12Europe and Interconnected Markets13-15Operational View16-17Consultation questions1
2、8-19Appendix20-22Glossary23-25Welcome ContentsWelcome to our 2022 Winter Review and Consultation Report.This annual document provides a review of how what we said in the 2021/22 Winter Outlook Report compared to what actually happened.This document includes a review of all the standard analysis from
3、 the 2021/22 Winter Outlook Report in relation to elements such as demand levels,performance of generators and any operability challenges faced.This year we will be publishing an early view of Winter 2022/23 in July 2022 to give earlier information to the industry in light of the recent very high en
4、ergy prices.This means that the consultation questions in this document are less specific to the coming winter and more about this document and the Electricity Outlooks process in general.However,feedback on our potential plans and on preparations for the upcoming winter remains extremely important
5、and so we will make sure any comments and information received via this document are passed to the relevant teams within the ESO.If you would like to share your views,or if you have any general queries or comments,please dont hesitate to email us at ,join us for a discussion at our Operational Trans
6、parency Forum(OTF)or get in touch via social media.This document covers Winter 2021/22 from the electricity perspective.National Grid Gas Transmission(NGGT)publish a similar document from the gas perspective,the Gas 2022 Winter Review and Consultation Report,which can be found here.We continue to en
7、gage with NGGT on approach and consistency.2Key Messages/Winter Review 2021-22123MarginsMarginsPricesPricesAs margins over winter 2021/22 were less tight than the previous winter,no Electricity Margin Notices(EMNs)were issued.The Winter Outlook Reporthighlighted a potential need for EMNs but none we
8、re issued.High wholesale electricity prices meant that the cost of individual ESO actions was higher than in previous years although overall volumes of actions were lower.This was largely due to the unexpected and significant rise in gas prices which translated into higher balancing costs overall an
9、d therefore increased costs for consumers.System conditionsSystem conditionsConditions over Winter 2021/22 were close to average with no prolonged cold spells coincident with low wind output.Interconnectors imported when needed,and availability of thermal generation was in line with forecasts.3Revie
10、w/MarginsOperational surplus:a look back at our Winter Outlook Report forecastsThe 2021/22 Winter Outlook Report contained a day-by-day view of operational margin(also referred to as surplus)and this is shown in Figure 1.The green bars represent the transmission system demand forecast(under average
11、weather conditions,with average embedded wind generation).Demand is then combined with the expected reserve requirement(in orange).The red dotted line represents where demand and reserve could be,should average cold temperature conditions be experienced thereby raising demand levels.This is referred
12、 to as ACS(Average Cold Spell)conditions.Finally,the light and dark blue and purple lines represent the forecast of generation supply when combined with low,medium and high imports from interconnectors.Note that generation supply is made up of Balancing Mechanism generation availability submissions(
13、de-rated using historic data to take account of breakdowns)plus an assumption of expected wind generation.Other forms of distribution connected generation are excluded as quoted demands are at transmission level.This day-by-day chart showed that normalised peak transmission demand was expected in mi
14、d-December.The minimum operational surplus under average weather conditions was projected to be lowest throughout December to mid-January(excluding the Christmas period).Figure 1.Day-by-day forecast view of operational surplus for winter 2021/22(Figure 1 from Winter Outlook Report 2021/22)3035404550
15、556001 Nov 2108 Nov 2115 Nov 2122 Nov 2129 Nov 2106 Dec 2113 Dec 2120 Dec 2127 Dec 2103 Jan 2210 Jan 2217 Jan 2224 Jan 2231 Jan 2207 Feb 2214 Feb 2221 Feb 2228 Feb 2207 Mar 2214 Mar 2221 Mar 22GWDateReserve requirementMax normal demand forecast(inc.Ireland export and no triad avoidance)ACS forecast
16、demand inc.reserve requirement and exports to IrelandAssumed generation with low imports from EuropeAssumed generation with medium imports from EuropeAssumed generation with high imports from Europe4How did the winter compare to the forecast in the Winter Outlook Report?Figure 2 overlays the forecas
17、t from the Winter Outlook Report with the actual outturns from the winter for both demand and plant availability and is designed to be comparable with Figure 1 on the previous page.Demandgreen and orange bars respectively show the forecast daily normal demand and reserve requirements as in the Winte
18、r Outlook Report(exact same values)solid black line indicates daily outturn total of“demand plus reserve”.dotted red line represents the forecast Average Cold Spell(ACS)peak demand at transmission level as in the Winter Outlook Report(exact same values).The actual winter peak demand was close to the
19、 forecast peak,and well below the ACS peak.Supplydotted purple line shows the daily expected plant availability under the base case interconnector scenario from the Winter Outlook Report(exact same values).solid yellow line shows the actual daily plant availability,including wind output and intercon
20、nector flows.Tight margin days,occur when the solid black outturn demand is close to the solid yellow outturn supply.The graph in Figure 2 clearly demonstrates the variability inbothdemandandgenerationbutalsoshowshealthymargins for the majority of the winter.Figure 2.Day-by-day view of actual operat
21、ional surplus for winter 2021/2253035404550556001 Nov 2108 Nov 2115 Nov 2122 Nov 2129 Nov 2106 Dec 2113 Dec 2120 Dec 2127 Dec 2103 Jan 2210 Jan 2217 Jan 2224 Jan 2231 Jan 2207 Feb 2214 Feb 2221 Feb 2228 Feb 2207 Mar 2214 Mar 2221 Mar 22GWDateReserve requirementMax normal demand forecast(inc.Ireland
22、export and no triad avoidance)ACS forecast demand inc.reserve requirement and exports to IrelandAssumed generation with medium imports from EuropeActual Available GenerationActual Demand&ReserveReview/MarginsHow did the winter compare to the forecast in the Winter Outlook Report?Figure 3 overlays th
23、e forecast range for operational surplus from the Winter Outlook Report with the actual outturns from the winter for operational surplus.In the Winter Outlook Report we published a central view for operational surplus(dashed green line)which assumed typical conditions and medium imports.To explore t
24、he sensitivities around this central view,we simulated many possible scenarios for weather,demand,conventional generation availability,wind generation output and interconnector availability and,for each of these scenarios,we calculated the daily surplus time series across the entire winter for that
25、scenario.This did not include any ESO actions.Our credible range was defined as the 90%confidence bound for the day-by-day fluctuations in surplus(red dashed area on chart).Figure 3 overlays this forecast range with the outturn of operational surplus for winter 21/22(solid purple line).From this you
26、 can see that the actual surplus varies across the winter,but stays within this range for the vast majority of the time.There were just 15 days when the surplus was outside this range,these were the days with the tightest margins.Figure 3.Day-by-day view of actual operational surplus for winter 2021
27、/22 against the forecast surplus and credible range sensitivity from the Winter Outlook Report-505501 Nov 2111 Nov 2121 Nov 2101 Dec 2111 Dec 2121 Dec 2131 Dec 2110 Jan 2220 Jan 2230 Jan 2209 Feb 2219 Feb 2201 Mar 2211 Mar 2221 Mar 22GWDateForecast surplus-90%confidence boundSurplus under
28、 average conditions with medium importsIndicative outturn surplus6Review/MarginsReview/MarginsHow did the winter compare to the forecast in the Winter Outlook Report?Overall,winter 21/22 was windier than the previous winter,and temperatures were close to the seasonal average,meaning margins were not
29、 unduly tight.What we said in the Winter Outlook ReportWhat actually happenedWhy was there a difference?Average Cold Spell(ACS)transmission demand to be met on all days under the high and medium import interconnector scenarios.ACS demand(calculated proxy rather than metered figure)would not have bee
30、n met in all weeks but there was sufficient generation and interconnector imports to meet demand throughout the winter period.The Winter Outlook Report considers what would happen under different average conditions whilst the outturn fluctuates around the average level.Had cold spells fallen on diff
31、erent days the ESO would have called upon the market to deliver a response through its range of routine tools(parison has to be hypothetical).To have sufficient operational surplus throughout winter when routine tools such asmargin notices are used.We expect to issue a broadly similar number of EMNs
32、 as last year(EMNs in winter2020/21=6).Operational surplus was sufficient throughout the winter and we issued just two CMNs and no EMNs.Surplus was within our credible range of outcomes throughout the majority of the winter.The Winter Outlook Report considered the possibility of system conditions be
33、ing outside of the typical range.Temperatures outturned close to the seasonal normal average,interconnector availability and flow patterns over tight periods were as expected and wind output levels were generally high.Table 1 below shows the days when Electricity Margin Notices(EMNs)and Capacity Mar
34、ket Notices(CMNs)were issued over the winter period.There were no EMNs issued in winter 2021/22(compared to 6 issued in winter 2020/21),and there were only 2 CMNs(winter 2020/21:2 CMNs).Across the last two winters,three CMNs have been issued when margins were relatively healthy,including both CMNs l
35、ast winter.Under a specific set of circumstances,CMN margin is calculated to be too pessimistic.The ESO are implementing a fix to this ahead of next winter and we will continue to monitor margins and aim to investigate and engage promptly with industry in the event that any further spurious CMNs are
36、 issued.DateEMNCMN3 DecemberNoYes24 JanuaryNoYesTable 1.Days of EMNs and CMNs over Winter 2021/227Figure 4.Wind output against equivalent firm capacityFor wind generation,we consider a shortfall to be the gap between actual wind generation on a given day and the level assumed in the Winter Outlook R
37、eport which is based on a statistical consideration of the contribution of wind to capacity adequacy(i.e.not its average annual load factor).Figure 4 shows this Equivalent Firm Capacity(EFC)for wind assumed and what was actually available throughout the winter at peak.Wind generation output was high
38、 throughout most of the winter.On many of the days with tighter margins,wind generation output compensated for any shortfall in other forms of generation.Wind generation output8Other generation shortfallFor Continental interconnectors,we treat shortfall as the gap between actual availability and our
39、 high import scenario in the Winter Outlook Report.For all other generators,it is the difference from the de-rated daily expectations of the Winter Outlook Report and the actual available generation on the day.The main drivers for lower margins came from nuclear and CCGT plant being less available t
40、han had been notified at the time of the Winter Outlook Report.Nuclear generation availability was lower than forecast through most of the winter.There was also reduced interconnector availability at times across the whole winter due to unplanned outages but,despite this,imports were still typically
41、 available when needed at peak.More detail on other generator shortfall is available in the data workbook which can be downloaded here.Review/Margins02468101214Wind output(GW)Wind equivalent firm capacity output forecastActual wind output at peakFigure 5 shows the difference or shortfall between gen
42、eration availability notified when the Winter Outlook Report was published,and the prevailing view of availability at real time.There are a number of different reasons for the lower than anticipated availability of generators and no common theme.This chart excludes wind and solar generation assets.T
43、here is no impact of a large shortfall between expectations and outturns when demands are lower,typically at weekends and over Christmas.When forecasting interconnector flows in the Winter Outlook Report over the peak period of the day,we expect imports from the continent to GB and exports from GB t
44、o Ireland.We model both a high import case based on outage plans and price spreads and a more conservative base case which includes some unavailability as well as lower levels of import.There were planned outages affecting IFA and NSL interconnectors ahead of the winter and,beyond this,there were a
45、high number of unplanned interconnector outages over the winter,details of which are explored later in the report.Despite this,winter interconnector availability was consistently higher than the base case and typically in line with the high case(see Figure 6).Generation and interconnector background
46、 to marginsFigure 5.Shortfall between generation availability notified in the Winter Outlook Report and actual generator availability(excluding wind and solar)Figure 6.Interconnector scenarios in the Winter Outlook Report and actual availability during peak times*Outage continues beyond the winter p
47、eriod373945355Availability(GW)Actual generator availabilityWinter Outlook forecast availability9012345601/11/2115/11/2129/11/2113/12/2127/12/2110/01/2224/01/2207/02/2221/02/22IC Availability(GW)ActualHighBaseReview/MarginsPeak actual weather-corrected Transmission System Demand(TSD)was in
48、 line with the forecast from the Winter Outlook Report.The highest normalised demand was expected(from the Winter Outlook Report)in the week commencing 13th December,the actual peak demand occurred in the week commencing 6th December(see Figure 6).Otherwise demand tracked broadly in line with our fo
49、recast.2021/22 Winter Outlook Reportforecast peak(normal weather used)(GW)Actual 2021/22 peak(weather-corrected)(GW)Actual 2021/22 peak(not weather-corrected)(GW)46.846.747.1Figure 7.Peak Transmission System Demand(TSD)forecast and outturn for winter 2020/21(weather-corrected)CMN dateDay of weekActu
50、al Peak TSD on days with a CMN(GW)3 Dec 2021Friday44.2 GW24 Jan 2022Monday45.0 GWTable 3.Actual peak Transmission System Demand on days with CMNs(not weather-corrected)*For the purpose of the Outlook and Review Reports,TSD includes national demand,600MW of station load and 750MW export on interconne
51、ctors(over the peak only).On both occasions when CMNs were issued,actual TSD(as opposed to weather-corrected as in the forecast)was lower than the actual winter peak TSD(47.1 GW)in Table 5.In general,times when margins are tight do not necessarily occur on the days with the highest demand but on the
52、 days with the biggest shortfall of generation.Transmission demandFigure 8.Daily actual and weather-corrected peak demands including triad avoidance404550Triad avoidance estimate(GW)Demand(GW)Triad avoidanceWeather-corrected transmission system demandActual transmission system demandRevie
53、w/Margins36384042444648Demand(GW)Week beginningNormal forecastNormal outturnTable 2.Peak transmission system demands for winter 2021/22Triad avoidance occurs when industrial and commercial users alter their pattern of energy use during peak periods to avoid transmission charges.The three half-hourly
54、 periods with the highest demand over the winter,separated by 10 calendar days,are known as Triads.Triad avoidance levels were lower again than the previous year(maximum estimated avoidance level stands at 1.3 GW),down from 1.7 GW the year before.As shown in Figure 9,one Triad corresponds to much lo
55、wer temperature than the seasonal normal temperature for that date,while the others occurred under seasonal normal conditions in January.What we said in the Winter Outlook ReportWhat triad avoidance occurred(estimation)Why was there a difference?Maximum forecast Triad avoidance:1.2 GWThe values corr
56、esponding to the three triad dates(operational view)were 0 GW,0 GW and 0.4 GW(see Table 9).Maximum estimated triad avoidance was broadly in line with our forecast ahead of the winter at 1.3 GW compared to a forecast of 1.2 GW.This maximum response was not seen on any of the actual triad days however
57、.Response rates close to the forecast did occur through late November,and through much of January,around the times of the triads,but not during the triad days themselves.*The triad avoidance estimate is not based on demand reduction data provided to us by suppliers,customers or aggregators.DateTimeH
58、alf hour endingNational Demand(MW)Estimated*triad avoidance(HH corresponding with the peak)(MW)29/11/205/01/220/01/220Figure 9.Daily actual temperature for winter 2021/2022 and seasonal normal temperature alongside the date of the three triads(three vertical black li
59、nes)Table 4.Details of Triads for winter 2021/22141618TriadActual Temperature at 17:00GMT(C)Seasonal normal temperature(30 yrs average of observed temp)at 17:00GMT(C)Review/Triad avoidance*Clean spark spread:The revenue that a gas-fired generation plant receives from selling electricity o
60、nce fuel and carbon costs have been accounted for.Clean dark spread:The revenue that a coal-fired generation plant receives from selling electricity once fuel and carbon costs have been accounted for.What we said in the Winter Outlook ReportWhat actually happenedWhy was there a difference?Clean spar
61、k spreads vs.clean dark spreads*Remaining coal-fired generation to potentially run more frequently due to price effects(but for overall levels of coal generation to remain low due to continued reductions in capacity levels).Coal provided the same proportion of generation as the previous winter,and o
62、verall levels remained low,while gas generation output was lower than in winter 2020/21.Wind generation was higher than expected displacing some gas generation,and gas prices were also high.Breakdown rates(this term covers all aspects of plant reliability,including restrictions and unplanned generat
63、or breakdowns).Generator reliability to be broadly in line with recent winters although coal,CCGT and biomass plant had a slight increase in expected breakdown rate compared to the previous winter.Breakdown rates(where by breakdown we mean outages that were not notified in advance of the outage,and
64、do not include planned unavailability)on average across the winter as a whole were largely in line with expectations(see Table 5)with most generators within a small range of between 1 and 3%.However,the breakdown rate for nuclear was much higher than forecast,at 20%.OCGT breakdown rate was also sign
65、ificantly higher at 11%compared to a forecast of 5%.Unexpected outages were higher for OCGTs and nuclear generation,nevertheless the percentage energy provided by nuclear generation across the winter was the same year on year.Figure 10.Percentage of energy provided by each fuel type over Winter 2020
66、/21 and Winter 2021/22(transmission connected)Fuel TypeForecastActualCoal11%8%CCGT6%5%Nuclear9%20%OCGT5%11%Pumped Storage3%2%Biomass5%8%Hydro9%6%Table 5.Breakdown rates by fuel type for winter forecast and actual winter.0%5%10%15%20%25%30%35%40%45%Percentage Energy Provided(%)Fuel Type2020/212021/22
67、12Review/Electricity supply-250-200-150-0200250-2500-2000-1500-0001/11/2101/12/2101/01/2201/02/2201/03/22GB france price differential(/MWh)Net IC flows(MW)Net flows over French IcsGB-France price differentialWhat we said in the Winter Outlook ReportWhat actual
68、ly happenedWhy was there a difference?Overview of continental European interconnectors(BritNed,IFA,IFA2,NEMO Link,NSL)Imports into GB at peak times via the IFA,IFA2,BritNed and Nemo Link interconnectors,although occasionally not at full import and subject to weather variations.During times of tight
69、margins,such as a typical period when an EMN could be issued,imports continue into GB but at closer to full import.There were more periods of export to continental Europe at peak times than usual,along with a much higher level variation in import at peak.Most exports that were seen at peak were over
70、 interconnectors to France.This was driven by unplanned outages and relatively higher prices in European markets.We dont have historic flows for NSL as it only recently began commercial operation but we expect imports to GB,especially at times of tight margins,based on price spreads.NSL began runnin
71、g on 01/10/21.As part of its trial phase it spent a lot of time running at partial capacity,with a capacity of 700 MW through most of the winter.As seen in Figure 12,NSL flowed into GB as expected.N/AFigure 11.IFA,IFA2,BritNed,Nemo Link and NSL flow at peak timesFigure 12.Interconnector flows at pea
72、k between France and GB combined with the GB France price differential(positive values signify imports into GB and GB prices ahead of French prices)-2-10123456GWNSLIFA2NemoBritnedIFA13There was greater variation in interconnector imports at peak than in previous winters,but flows still followed pric
73、e spreads across the winter,with imports into GB at peak seen throughout the vast majority of the winter.Continental EuropeReview/Europe and interconnected marketsWhat we said in the Winter Outlook ReportWhat actually happenedWhy was there a difference?Physical capabilities Interconnector capability
74、 will be affected by the following outages:IFA:4 Oct-23 Oct(0 MW),24 Oct-27 Mar(1000 MW)NSL:1 Oct-31 Oct(700MW)There were a high number of changes in interconnector availability status through the winter across a range of interconnectors.Unplanned outages impacted interconnector availability.Europea
75、n forward pricesForward prices,including peak prices,in GB to be ahead of those in continental Europe for the majority of the winter periodPrices in continental European markets were closer to GB prices than usual,and exceeded them more often(see Figure 11).While we still saw a net flow of electrici
76、ty from the continent to GB as expected the majority of the time,there were more occasions than usual when this wasnt the case as prices in France were higher than in GB on a number of occasions.Prices were higher than usual in both GB and European markets reducing the differential that is usually s
77、een.Figure 13.GB and European day-ahead baseload prices across winter 2021/22The Data Workbook contains further detail on:Interconnector outages;specific interconnector behaviour;andBreakdown rates0500300350400450500Baseload price(/MWh)GB BaseloadNetherlands BaseloadBelgian BaseloadFrench
78、 BaseloadNorwegian Baseload14Review/Europe and interconnected marketsWhat we said in the Winter Outlook ReportWhat actually happenedWhy was there a difference?Overview of Irish interconnectors(Moyle and EWIC)Moyle and EWIC to typically export from GB to Northern Ireland and Ireland during peak times
79、,although at substantially less than maximum capacity due to high demand on the GB system.During a typical EMN period,exports to Northern Ireland and Ireland are expectedto reduce to zero.Both Moyle and EWIC exported electricity to Northern Ireland at peak times for the majority of the winter(see Fi
80、gure 14).N/AFigure 14.Moyle and EWIC flows at peak times(positive MW values mean flows into GB)-1000-800-600-6008001000MWMoyleEWIC15Flows across the EWIC and Moyle interconnectors to Ireland and Northern Ireland were broadly as expected.Irish interconnectorsReview/Europe and interconne
81、cted marketsWe took action across the five core areas to ensure operational security over the winter period.ThermalThe TO experienced delays to the scheme to connect a major windfarm at Tealing substation.This resulted in greater levels of constraints across the B4 boundary.Additional outages and de
82、lays were experienced/required for bird nest removal which exacerbated the situation and the restrictions ran beyond autumn and into the winter months.A proposed scheme to allow maximum use of the Western Link HVDC could not be accelerated in to 2022 as planned,impacting the B6 boundary between Scot
83、land and England following the decommissioning of Hunterston in January 2021.NSL interconnector completed commissioning and,as noted in the Winter Outlook Report,it did contribute to volumes required to be bid off above the B7 boundary.It can also restrict the B6 boundary when NSL is at full export.
84、However,as expected we did not have to take additional actions to manage operability issues relating to the import into ScotlandThe significant rise in gas prices had the consequence of increasing the net exposure cost of all thermally driven outage combinations,as replacement energy prices rose to
85、extraordinary levels.StabilityAs part of Stability Pathfinder Phase 1,three further units went live over the winter providing additional inertia and fault infeed to the network,thereby reducing the reliance on buying on thermal plants during periods of high renewable generation.The remaining units a
86、re expected to go-live by this year providing additional support for winter 2022/23.FrequencyFrom November 2021 to March 2022 there were no frequency events causing a deviation greater than 0.5 Hz.Our Dynamic Containment High service was in operation last winter for the first time and this was the f
87、irst winter whereby Short Term Operating Reserve was procured through a day ahead auction mechanism.More details can be found on the following page.RestorationOur Restoration capability was maintained over the Winter period as per our requirement.VoltageControl of high voltages proved challenging th
88、ough manageable through the Christmas and New Year period.High availability of synchronous generation meant that lack of available generation was not the main challenge.Variable system conditions were seen through the period,with swings from high wind and high flows to low wind with low flows requir
89、ing frequent reassessment within day to optimise the requirement for voltage control.Actions to synchronise generation to manage the system reactive power balance and voltages were required,depending on the forecast system demand and other conditions.Some operational actions were also required.16Rev
90、iew/Operational view transmission system ServicesDynamic Containment(DC)is designed to operate post-fault,i.e.for deployment after a significant frequency deviation in order to meet our most immediate need for faster-acting frequency response.Dynamic Containment Low(DCL)was launched in October 2020
91、with Dynamic Containment High launched in October 2021.We launched Dynamic Containment High as a new tool in our tool-kit to help manage largest loss risks.exporting interconnectors or demand loss risks.We also improved our procurement of DC,making our procurement more granular which enabled consume
92、r savings.The move to EFA block procurement meant that,instead of procuring volume to cover the maximum DC requirement over a 24-hour window,the ESO was able to signal the value of DC across a day,as system conditions such as demand,inertia and largest loss risks change.Last winter we saw providers
93、exiting DC during tight periods impacting volume across the day.More granular procurement enables providers to choose which market they participate in and which EFA block they were available for which helped to minimise the impact of such market behaviourThe record-high wholesale prices since the st
94、art of September 2021 led to increased volatility in the participation of Dynamic Containment,with some providers choosing to participate in the wholesale market during lucrative periods.However,despite the impact of the wholesale energy price on participation,the implementation of EFA block procure
95、ment still resulted in a saving of around 18.7m during the period compared to the counterfactual scenario if the procurement granularity and costs had remained unchanged.The Winter 2021/22 season,was also the first in which Short Term Operating Reserve(STOR)was procured at the day-ahead level.We exp
96、erienced some similar challenges with market providers leaving the market on tight days but reviewed our buy order methodology in response to this and were able to mitigate this.These changes brought with it significant challenges in no small part due to the unprecedented wholesale market dynamics w
97、hich permeated all Ancillary Services markets.Notwithstanding this,the ESO were able to deliver significant savings through the implementation of the procurement strategy for STOR versus the costs that would have been incurred in the absence of the service.The primary challenge arising during the Wi
98、nter 2021/22 season was reserve volume shortfalls:where less volume was secured via the day-ahead auction process than was required.Occurrences of reserve shortfalls were most prevalent on days characterised by significant electricity system tightness,i.e.low margin.More specifically,the associated
99、effect of system tightness on prices in the Balancing Mechanism and wholesale market saw a marked fall in the number of providers tendering for day-ahead STOR contracts.This,in turn,resulted in fewer MWs of firm reserve capacity than required being procured ahead of delivery.To address this,the ESO
100、implemented changes in the pricing methodology for Short Term Operating Reserve during the Winter 2021/22 season to ensure that the service was providing sufficient commercial incentive for providers,even on days where the electricity system was forecast to be tight.As a result of the amendments,and
101、 the inherent benefit of Day-Ahead procurement versus real-time,the ESO were able to delivery cost savings of over 90mn between 1st October 2021 and 31st March 2022,against the alternative cost of the STOR service,(i.e.the cost of securing the full daily requirements via the Balancing Mechanism in r
102、eal time).17Review/Operational view transmission system This years consultation closes on 30 July 2022.Please refer to the next slide for questions.You can send us your views via email:The ENCC Operational Transparency Forum will also provides an opportunity for you to share your views on the winter
103、 ahead and ask us questions.Please register here.Consultation/IntroductionThe purpose of this annual consultation is to gather feedback on our Outlook documents and gather stakeholder insight each year to inform our analysis for the upcoming Winter Outlook Report,to be published in October 2022.Your
104、 views on the market and related issues are always important to provide a comprehensive picture of the challenges and opportunities of the forthcoming winter.It also allows us to test how useful the suite of Outlook documents are and to identify areas for improvement with our engagement.The ESO has
105、committed to providing an early view of winter 2022/23 in July 2022 to give earlier information to the industry in light of the recent very high energy prices.As this early view of winter 2022/23 will include a consultation aspect,the consultation questions in this document are less specific to wint
106、er 2022/23 and more about this document and the Electricity Outlooks process in general.However,feedback on our potential plans and on preparations for the upcoming winter remains extremely important and so we will make sure any comments and information received via this document are passed to the r
107、elevant teams within the ESO.18Consultation/QuestionsWinter Review and Consultation1.What do you use the Winter Review and Consultation Report for?What information in the report is most useful to you for this?2.Is there anything else that could be included in the Winter Review and Consultation Repor
108、t?3.How do you think the Winter Review and Consultation Report could be improved more generally to increase benefit for consumers?4.Do you have any other feedback on this report or the other Outlook documents?Winter Outlook5.Is there anything you are particularly interested in seeing as part of our
109、early winter view in July?6.Is there anything different you would like to see in the Winter Outlook Report,to be published in October 2022?7.Do you have any general queries or concerns in relation to winter 2022/23?19Appendix Contains extra information on demand definitions and margin notifications2
110、0The market or the ESO may take actions to increase exports across the interconnectors or increasing pumping at pumped storage stations to increase the amount of demand on the transmission system if required.Demand Definitions21Margins on the electricity system can vary throughout the winter.Thiswil
111、ldependonactualweatherpatternsandoutagestakenbygenerators.The Winter Outlook Report also considers how marginscould change on a week-by-week basis throughout winter for thetransmission system only.There are two views of margins which the ESO works with.CapacityMarket Margins are based on whole syste
112、m demand and wholesystem capacity(including Distributed Energy Resources(DER).As the majority of the DER are not visible to the ESO,OperationalMargins are based on transmission system demand and transmissionsystem capacity.The EMN process is based around the OperationalMargins and the CMN process is
113、 based around the Capacity MarketMargins.The EMN and CMN processes both rely on the visible generation asthat is the data provided to the ESO.The Winter Outlook Reportprovides both margin views;the overall Capacity Market Margin forthe winter as a whole and the weekly Operational Margin.Find out mor
114、e on the differences between Electricity Margin Notices(EMNs)and Capacity Market Notices(CMNs)here.Did you know?/Capacity Market Notices and Electricity Margin NoticesThere are a number of significant differences between the operational System Warning messages(such as EMN)and Capacity Market Notices
115、:1.Trigger-Capacity Market Notices are issued based on an automated system margincalculation using data provided by market participants,whereas System Warnings aremanually issued by the National Grid ESO control room using engineering judgement basedon experience and knowledge of managing the electr
116、icity transmission system.2.Threshold-Capacity Market Notices are triggered where the volume of available generationabove the sum of forecast demand and Operating Margin,is less than 500MW.The 500MWthreshold is taken from the Capacity Market Rules.System Warnings are triggered by varyingvolumes,for
117、example a EMN may be issued where National Grid ESO expects to utilise500MW of its Operating Margin.There is therefore a 1,000MW+variance between these twodiscrete alerts.3.Constraints-The Capacity Market Notice calculation does not take account of anytransmission system constraints that may be prev
118、enting capacity from accessing the network.System Warnings however do take such constraints into account.4.Lead time-Capacity Market Notices are initially issued four hours ahead of when thechallenge is foreseen,whereas System Warnings can be issued at any time but we wouldexpect to issue a first EM
119、N at the day ahead stage.22GlossaryActive Notification System(ANS)A system for sharing short notifications with the industry via text message or email.Breakdown ratesA calculated value to account for unexpected generator unit breakdowns,restrictions or losses.Forecast breakdown rates are applied to
120、the operational data provided to the ESO by generators.They account for restrictions and unplanned generator breakdowns or losses close to real time.Rates are based on how generators performed on average by fuel type during peak demand periods(7am to 7pm)over the last 3 winters.BritNedBritNed Develo
121、pment Limited is a joint venture between Dutch TenneT and British National Grid that operates the electricity interconnector between Great Britain and the Netherlands.BritNed is a bi-directional interconnector with a capacity of 1,000MW.You can find out more at .Capacity Market(CM)The Capacity Marke
122、t is designed to ensure security of electricity supply.This is achieved by providing a payment for reliable sources of capacity,alongside their electricity revenues,ensuring they deliver energy when needed.Carbon intensityA way of examining how much carbon dioxide is emitted in different processes.I
123、t is usually expressed as the amount of carbon dioxide emitted per kilometre travelled,per unit of heat created or per kilowatt hour of electricity produced.Clean dark spreadThe revenue that a coal fired generation plant receives from selling electricity once fuel and carbon costs have been accounte
124、d for.Clean spark spreadThe revenue that a gas fired generation plant receives from selling electricity once fuel and carbon costs have been accounted for.CMP264/265Changes to the Charging and Use of System Code(CUSC).These changes were phased in from1 April 2018 and reduce the value of avoided netw
125、ork charges over triad periods.CO2 equivalent/kWhThe units gCO2eq/kWh are grams of carbon dioxide equivalent per kilowatt-hour of electricity generated.Carbon dioxide is the most significant greenhouse gas(GHG).GHGs other than carbon dioxide,such as methane,are quantified as equivalent amounts of ca
126、rbon dioxide.This is done by calculating their global warming potential relative to carbon dioxide over a specified timescale,usually 100 years.Combined cycle gas turbine(CCGT)A power station that uses the combustion of natural gas or liquid fuel to drive a gas turbine generator to produce electrici
127、ty.The exhaust gas from this process is used to produce steam in a heat recovery boiler.This steam then drives a turbine generator to produce more electricity.Distribution connectedAny generation or storage that is connected directly to the local distribution network,as opposed to the transmission n
128、etwork.It includes combined heat and power schemes of any scale,wind generation and battery units.Generation that is connected to the distribution system is not usually directly visible to National Grid ESO as the system operator and acts to reduce demand on the transmission system.East West Interco
129、nnector(EWIC)A 500MW interconnector that links the electricity transmission systems of Ireland and Great Britain.You can find out more at Forward Agreement(EFA)EFA blocks are a product used to trade electricity on the wholesale market.There are 6 EFA blocks in a baseload day.EFA5(15:00 19:00)contain
130、s the Darkness Peak in winter.European Union Emissions Trading System(EU ETS)An EU-wide system for trading greenhouse gas emission allowances.The scheme covers more than 11,000 power stations and industrial plants in 31 countries.FloatingWhen an interconnector is neither importing nor exporting elec
131、tricity.23FootroomWhen a generator can reduce its output without going below minimum output levels.Forward pricesThe predetermined delivery price for an underlying commodity,such as electricity or gas,as decided by the buyer and the seller of the forward contract,to be paid at a predetermined date i
132、n the future.Gigawatt(GW)a measure of power.1 GW=1,000,000,000 watts.Interconnexion FranceAngleterre(IFA)A 2,000 MW link interconnector between the French and British transmission systems.Ownership is shared between National Grid and Rseau de Transport dElectricit(RTE).Interconnexion FranceAngleterr
133、e 2(IFA 2)A 1000 MW link between the French and British transmission systems(commissioned early 2021).Ownership is shared between National Grid and Rseau de Transport dElectricit(RTE).InertiaSystem inertia is how resilient a system is to frequency change.System inertia will depend on what types of g
134、eneration are connected to the system.Typically,generators with large moving parts have high inertia because their moving parts continue to move even after they are switched off or turned down.In contrast,some types of generation that have no moving parts,such as solar panels,are classed as low iner
135、tia generationInflexible generationTypes of generation that require long notice periods to change their output,do not participate in the Balancing Mechanism or may find it expensive to change their output due to commercial arrangements or technical reasons.Examples of inflexible generation include n
136、uclear,combined heat and power(CHP)stations,and some hydro generators and wind farms.Interconnector Electricity interconnectors are transmission assets that connect the GB market to other marketsincluding Continental Europe and Ireland.They allow suppliers to trade electricity between thesemarkets.L
137、oad FactorsAn indication of how much a generation plant or technology type has output across the year,expressed as a percentage of maximum possible generation.These are calculated by dividing thetotal electricity output across the year by the maximum possible generation for each plant ortechnology t
138、ype.Margins Notice IssuedWhen forecast demand for the day ahead exceeds a pre-defined forecast of supply.MoyleA 500 MW interconnector between Northern Ireland and Scotland.You can find out more atwww.mutual-.National electricity transmission system(NETS)High voltage electricity is transported on the
139、 transmission system from where it is produced towhere it is needed throughout the country.The system is made up of high voltage electricity wiresthat extend across Britain and nearby offshore waters.It is owned and maintained by regionaltransmission companies,while the system as a whole is operated
140、 by a single Electricity SystemOperator(ESO).Nemo LinkA 1000MW interconnector between GB and Belgium.Ownership is shared between National Gridand Elia.Positive and negative reserveTo manage system frequency and to respond to sudden changes in demand and supply,the ESOmaintains positive and negative
141、reserve which is the capability to increase or decrease supplyand demand.Pumped storageA system in which electricity is generated during periods of high demand by the use of water that has been pumped into a reservoir at a higher altitude during periods of low demand.Glossary24Rate of Change of Freq
142、uency(RoCoF)How quickly system frequency changes on the electricity network.Usually measured in Hertz per second.Some generators have a protection system that will disconnect them from the network if the Rate of Change of Frequency goes above a certain threshold.Reserve requirementTo manage system f
143、requency,and to respond to sudden changes in demand and supply,the ESO maintains positive and negative reserve to increase or decrease supply and demand.This provides head room(positive reserve)and foot room(negative reserve)across all assets synchronised to the system.Seasonal normal weatherThe ave
144、rage set of conditions we could reasonably expect to occur.We use industry agreed seasonal normal weather conditions.These reflect recent changes in climate conditions,rather than being a simple average of historic weather.Short Term Operating Reserve(STOR)At certain times of the day,we may need acc
145、ess to sources of extra power to help manage actual demand on the system being greater than forecast or unforeseen generation unavailability.STOR provides this reserve.Stability Pathfinder(Phase 1)A process to identify the most cost-effective way to address stability issues in the electricity system
146、.Phase 1 was looking to increase inertia and resulted in 12 contracts being awarded to 5 providers.Transmission System Demand(TSD)Demand that the ESO sees at grid supply points,which are the connections to the distribution networks.Triad avoidance When demand side customers reduce the amount of ener
147、gy they draw from the transmission network,either by switching to distribution generation sources,using on-site generation or reducing their energy consumption.This is sometimes referred to as customer demand management but,in this section,we are considering customer behaviour that occurs close to a
148、nticipated Triad periods,usually to reduce exposure to peak time charges.TriadsThe three half-hourly settlement periods with the highest electricity transmission system demand.Triads can occur in any half-hour on any day between November and February.They must be separated from each other by at leas
149、t ten days.Typically,they take place on weekdays around 4.30 to 6pm.VoltageUnlike system frequency,voltage varies across different locations on the network,depending on supply and demand for electricity,and the amount of reactive power in that area.Broadly,when electricity demand falls,reactive powe
150、r increases and this increases the likelihood of a high voltage occurrence.Weather-corrected demand The demand expected or outturned with the impact of the weather removed.A 30-year average of each relevant weather variable is constructed for each week of the year.This is then applied to linear regr
151、ession models to calculate what the demand would have been with this standardisedweather.Western High Voltage(HVDC)Link(WLHVDC)The Western Link uses DC technology to reinforce the UK transmission system and move electricity across the country in very large volumes between Hunterston in Scotland and
152、Deeside in North Wales.Winter period The winter period is defined as 1 October to 31 March.Glossary25Join our mailing list to receive email updates on our Future of Energy us with your views on the Winter Review Report at: and we will get in touch.You can write to us at:Energy Insights and Analysis,
153、Electricity System Operator Faraday HouseWarwick Technology Park Gallows Hill WarwickCV34 6DAElectricity System Operator legal notice Pursuant to its electricity transmission licence,National Grid Electricity System Operator Limited is the system operator of the national electricity transmission sys
154、tem.For the purpose of this outlook document,the terms“we”,“our”,“us”etc.are used to refer to the licensed entity,National Grid Electricity System Operator Limited.National Grid Electricity System Operator Limited has prepared this outlook document pursuant to its electricity transmission licence in
155、 good faith and has endeavoured to prepare this outlook document in a manner which is,as far as reasonably possible,objective,using information collected and compiled from users of the electricity transmission system together with its own forecasts of the future development of those systems.While Na
156、tional Grid Electricity System Operator Limited has not sought to mislead any person as to the contents of this outlook document and whilst such content represent its best view as at the time of publication,readers of this document should not place any reliance on the contents of this outlook docume
157、nt.The contents of this outlook document must be considered as illustrative only and no warranty can be or is made as to the accuracy and completeness of such contents,nor shall anything within this outlook document constitute an offer capable of acceptance or form the basis of any contract.Other th
158、an in the event of fraudulent misstatement or fraudulent misrepresentation,National Grid Electricity System Operator Limited does not accept any responsibility for any use which is made of the information contained within this outlook document.The Winter Review&Consultation Report is part of a suite of documents prepared by the Electricity System Operator on the future of energy.They inform the energy debate and are shaped by feedback from the wider industry.Visit our websitefor more information.26