Source · Select Committees · Business and Trade Committee
Recommendation 51
51
Accepted in Part
Require National Grid ESO to open markets, report carbon footprint, and plan for 2035 decarbonisation.
Recommendation
National Grid ESO’s markets for balancing the system and addressing constraints continue to be dominated by fast-acting gas plants. More flexible and responsive low-carbon assets, such as batteries, could lead to greater competition in National Grid ESO’s markets and offer more cost-effective services. We recommend that National Grid ESO opens up its markets to more participants and that it is transparent about the choices it makes when selecting which technologies will be used to balance the system. We further recommend that National Grid ESO reports on the carbon footprint of all its markets. In response to this report, we also ask that National Grid ESO sets out its transition plan to ensure that its markets align with the Government’s target to decarbonise the power system by 2035. (Paragraph 215) Decarbonisation of the power sector 109
Government Response Summary
The ESO acknowledges the importance of integrating low-carbon technologies but notes its current licence prevents considering technology type in decision-making. It states that carbon intensity for the Balancing Mechanism is already monitored and published, and it will consider how markets must evolve to align with its 2025 net zero target.
Government Response
Accepted in Part
HM Government
Accepted in Part
119. [Response provided by ESO] The Electricity System Operator procures services to balance demand and supply and to ensure the security and quality of electricity supply across Britain’s transmission system. The Balancing Mechanism is the ESO’s primary tool to balance supply and demand on GB’s network and is managed second-by-second. 120. The ESO understands how important it is to integrate low carbon technologies into the Balancing Mechanism and across our wider ancillary service markets. To decide on bids and offers to accept, the ESO reviews the technical parameters of all participants to see what they are physically capable of providing, to ensure the system is stable and safe. 121. The ESO always considers how competitively priced the bids are, but sometimes must consider other operational and locational factors in making a selection. The ESO’s current licence states it cannot take technology or fuel type into consideration in decision making. 122. As the ESO moves towards its 2025 target of operating a net zero electricity system for short periods of time, the ESO will consider how our markets must evolve to facilitate more low-carbon technologies contributing to system balancing and stability. At present, the carbon intensity of the Balancing Mechanism is actively monitored by the ESO, and these figures are published on its data portal.