Assessing competition within the Balancing Mechanism

Many generators which have flexibility to turn up and down compete for volume within the Balancing Mechansim. We assume CCGTs, gas peakers, pumped hydro and batteries can compete.

Modelling competition for system actions

We assess the capacity (MW) of flexible generation competing for system volumes in each region. The generator capacities are taken from Modo’s (national) capacity-expansion buildout, which is then split into different regions. For distribution-connected assets, we use the ratios of technology-specific volume by region taken from the Regional Future Energy Scenarios. For transmission-connected assets, the ratios come from the DUKES dataset.

To get the volume of flexible plant competing for bids or offers:

• All flex generators are assumed to be able to do bids and offers, symmetrically.
• Get the capacity of generators on the supply side of each boundary for bids, and on the demand side of the boundary for offers.
• Assume the ‘available, in-merit’ volume of flex plant available is 25% of the total fleet size in that region. This can be thought of as a ‘BM competition’ parameter, which is different in low and high scenarios. This 25% has been tuned using historical data in a back-test.

This gives us the in-merit, available flex generation by supply region, and by demand region, for system actions, in MW.

Modelling competition for energy actions

A generator cannot do both a system and energy actions at the same time.

So, the flexible generation doing system actions is used to determine how much national flexible capacity remains to participate in energy actions.

Region by region, we sum up the generators required for system actions to get the MW of generators doing system actions, nationally. The market size of MW generation available to provide energy actions is given by the total flex generation, nationally, minus those doing system actions, nationally.

This gives us the in-merit, available flex generation nationally for energy actions, in MW.