National Grid ESO Publishes Innovation Strategy 2021-22

Digitalisation is the top priority to transition to a cleaner energy system, according to National Grid ESO’s latest Innovation Strategy.

Covering the 2021-22 period, the new report ties in with the start of the new RIIO-2 regulatory period, which starts in April and runs until 2025. That’s the year the network operator believes it’ll be able to operate a zero-carbon electricity network.

The document outlines the need for greater harnessing of data and digital technologies, “whether that’s accurately forecasting wind power or sending the right signals to the market and consumers to help balance the grid efficiently.”

The Rationale Behind The Latest Innovation Strategy

“In our conversations and consultations with industry and stakeholders over the last year, one particular theme emerged as a shared priority in shaping that system: digital transformation.

“Almost everything we do is driven by data and modelling. It underpins our operational activities, and heavily influences our other innovation priority areas. It’s key to capturing the benefits of our transition to zero carbon.

“We’re no stranger to the power of digital. Artificial intelligence already supports our control room activities, and our forecasting capabilities are being boosted through machine learning.

“We’re also making our data more transparent, enhancing the way market participants interact with us and each other and enabling them to make informed choices.”

– Carolina Tortora, Head of Innovation and Digital Transformation for National Grid ESO

Exploring The Innovation Strategy Priorities

Described as a “call to arms” across all sectors, the four top priorities for the coming year are as follows:

(1) Digital Transformation: this is the top priority due to the dependency many of the other priorities have on this transformation. The ESO’s work is already driven by data and modelling, but to meet its goal of a zero-carbon system by 2025 it needs to “significantly step up our capabilities in this space”. It also aims to facilitate the digital transformation of the wider energy industry with open data and collaborative innovation.

(2) Future Markets: the strategy accepts the “current market structures are not yet fully fit for purpose in a net-zero world”. The reduced demand caused by the COVID-19 pandemic is cited as a “glimpse into the future”, leading to “worrying levels of volatility and high costs in wholesale, balancing and ancillary services markets”. The current market needs evolving to level the playing field for new players.

(3) Constraint Management: the volume of generation the network operator had to turn down to resolve constraints in summer 2020 was 50% higher than the same period in 2019. It wants to use the next regulatory period to introduce new mechanisms, markets or approaches that aim to “reduce the congestion costs ahead of the new boundary reinforcements”.

(4) Whole Energy System: the Innovation Strategy argues that while a whole system approach is crucial to achieving net-zero, there’s been limited “whole system innovation in the energy industry, despite strong signals from Ofgem and BEIS that this should be a focus”.

Lower down the Innovation Strategy priority list come areas such as forecasting of supply and demand, system restoration (i.e. Black Start), and overall system stability.

The refreshed Innovation Strategy builds on the ESO’s ongoing work, such as its annual Winter Outlook and Summer Outlook publications.

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