The value of within-day flexibility in the GB electricity market
Ed: This article predates November 2019, when ÅF and Pöyry came together as AFRY.
The results of a multi-client study, carried out in 2013, quantify the risks and opportunities for various players in providing flexibility to the GB system.
Our analysis quantifies the requirements for flexibility in the GB system as well as the potential revenues associated with the provision of this flexibility.
An imperfect world was modelled, capturing the effects of forecast errors (wind, solar and demand) and the fine tuning of trading positions between the day-ahead positions and outturn. We also examine the risks associated with the new Feed in Tariff Contract for Difference which replaces the Renewable Obligation as the policy mechanism for incentivising the build of renewable technology; those risks affect future Power Purchasing Agreement discounts.
Pöyry estimates that the wind forecast error between the day-ahead and outturn could increase by a factor of 300% while the risk associated with within-day re-trading cost for wind farms could be of the order of £2-4/MWh in 2030 depending on the scenarios.