Embedded Flexibility: The Return of ODFM and Last Resort Disconnection

As National Grid announce their intention to reinstate the Optional Downward Flexibility Management (ODFM) product this year, Head of Markets, Boz Bozhkov takes a look at the success of the scheme, as well as new proposals for emergency disconnections for embedded generators.

With recent spikes in power prices and the cold temperatures we’ve experienced this week, you could be forgiven for thinking that the demand crash seen at the start of the pandemic feels a very long way away now.

But as we move towards spring, you can be sure we’ll begin to see similar situations to those we saw on the energy system last year once again. As load factors for wind and solar begin increase, we can be relatively sure that the System Operator will need to access turn down services, just as they did from March 2020.

Clearly this is in National Grid’s thinking too, having recently published an open letter stating their intention to reinstate the Optional Downward Flexibility Management (ODFM) service for summer 2021. ODFM is an easy tool for National Grid to reinstate - until an enduring downward flexibility service is launched as part of the ongoing Reserve Reform work recently carried out by the System operator.

This was a really successful tool last year, enabling the system to be balanced in instances where generation outstripped demand. Over 4.7GW of capacity subscribed to this service across 363 sites. The service was used on five occasions and at its peak, 3.2GW of capacity was curtailed on 5 July. £11.9m in value was achieved for generators able to turn down and demand side players able to increase consumption.

From a SmartestEnergy perspective, over 200MW of assets in our portfolio signed up to take part in ODFM, achieving an average value of over £3000/MW over the summer where they were chosen to dispatch.

This has led to wider thinking surrounding the issue too. National Grid have recently launched a consultation on the last resort disconnection of embedded generation, aimed at creating an enduring set of rules which would allow distributed generation to be disconnected from the network in emergency situations.

In their proposed form, these rules would not include any compensation for generators as they are very much seen as the last available option. However, some industry groups are already lobbying for this to be changed.

You can read the consultation and feed in your views here