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Understanding Demand Side Response
Engaging with the Demand Side Response can allow battery owners and energy-intensive businesses to generate new revenue streams
What is Firm Frequency Response?
What is Firm Frequency Response (FFR)
Firm Frequency Response (FFR) is a critical part of how the National Grid balance the grid in real-time. It is typically the most valuable balancing service available to end users able to provide demand side response, but it is also the most challenging to engage with. To be eligible for Firm Frequency Response contracts, customers must be able to respond fully to movements in system frequency within just 30 seconds or less.
How Does Firm Frequency Response Work?
FFR capacity is procured using a monthly tender process. Potential service providers need to succeed in a pre-qualification assessment and sign onto a framework agreement before they are able to participate in the tender process. From the available tenders, National Grid will select each month the ones that are the most economical, while also considering the quality, quantity and nature of each service offered.
Too much generation compared to demand, or vice versa, can cause large deviations in system frequency in the grid. When there is a sudden imbalance, such as a power station unexpectedly shutting down, FFR uses pre-approved assets to rapidly reduce demand or increase generation, keeping the frequency of the grid within prescribed limits and preventing power outages.
Static Firm Frequency Response is the most widely used form of frequency balancing services, where participants pre-agree to reduce their consumption for a period of 30 minutes in the event of a significant drop in frequency. Typically called in to account for unexpected power outages, currently static FFR is used somewhere between seven and 12 times a year.
Dynamic Firm Frequency Response is used to constantly manage small variations in frequency, often second-by-second changes. Unlike static FFR, this service requires providers to either reduce or increase their consumption as frequency imbalances on the grid develop. Response must begin in just two seconds, and the length of a response for an individual provider ranges from just a few seconds to a few minutes.
How DO I Generate Revenue with Firm Frequency Response?
Payments from National Grid in return for providing FFR are typically split across two different factors. Availability Fee, which is calculated by the number of hours that a provider makes themselves available, whether they are called upon or not, and Nomination Fee, an additional payment when their asset is actually utilised. Payments vary depending on framework agreement and level of capacity agreed, but the instantaneous requirement means that they are substantially higher than other forms of Demand Side Response.
Battery energy storage systems are one of the most capable technologies when it comes to providing FFR, particularly dynamic FFR. Their ability to rapidly draw energy from the grid, or to deliver it back when called upon, make them a flexible and powerful asset in terms of grid balancing. The instantaneous response times of some available BESS means that they are able to respond to changes in grid frequency extremely quickly, making them ideal as a provider of dynamic FFR.
As businesses, particularly energy-intensive sectors, continue to struggle with the ongoing energy price crisis, Demand Side Response services represent a way to reduce overall energy costs by generating additional income by helping National Grid to balance the electricity network and mitigate the risk of disruption. For sites capable of meeting the stringent requirements laid out to qualify for FFR, it represents the most lucrative balancing mechanism currently available.
To find out more about how your business could generate additional revenue through demand side response services, speak to our team now
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