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Energy analytics

Assessing
the value of interconnection to the GB power system

Background

LCP were commissioned by the Independent Generators Group (IGG) to quantify the value of interconnection to the GB both in terms of security of supply and to the system overall.

The contribution of interconnection to security of supply is highly contentious however the group wanted an independent and fair assessment around the impact of additional transmission connections with other markets.

Our solution

We developed a Marginal Derating Factor to determine the value of incremental interconnector capacity to system security. This approach is based on calculating the amount of expected spare capacity in the connected markets during periods of supply shortage in GB. This crucially captured the effect of simultaneous tight margins in both markets due to correlations in demand and wind, which is not fully captured by the current methodology employed to calculate interconnector deratings.

Our EnVision modelling framework was then utilised to quantify the optimal level of interconnection to GB, the point at which whole system costs were minimised. This analysis allowed for the differences in the charging regimes faced by domestic generation relative to interconnection to be captured, including Carbon Price Support (CPS), Balancing System Use of system (BSUoS) and Transmission Network Use of System (TNUoS) charges.

The results

The analysis was used by the IGG in its discussions with BEIS, National Grid and Ofgem.

How we can help

Bespoke modelling solutions

We can help our clients with a wide range of issues from whole system modelling to individual power plant and policy impact analysis.

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We advise on the optimal dispatch of assets within the wholesale market, forward planning of maintenance activities and valuation of commercial upgrades to plant.

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Energy market forecasting and scenarios

We provide detailed forecasts of the GB and Irish power markets, using our EnVision modelling framework. This can provide both short-term and long-term forecasts of all key system metrics, from system wide to individual assets.

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Our understanding of market dynamics and modelling experience allow us to offer evidence-based recommendations on complex policy and regulatory issues that allow fully informed decision-making.

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Transaction support and generation asset valuations

We combine bottom-up unit-level modelling with market and policy insights to quantify the value and understand the risk associated with any generation asset. 

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