security of supply risks
How LCP specialists helped the UK government quantify the risk of power blackouts
The Department of Energy and Climate Change (DECC) commissioned us to build a model that quantified the risk of system security events in the electricity market, to support their policy design decisions on the Capacity Market.
We worked with DECC to deliver a model, known as the Unserved Energy Model (UEM), that produces security of supply metrics using high-resolution stochastic modelling.
The model we developed employed historical half hourly data from NASA on wind speeds to simulate the output of individual wind farms based on their location. This allowed the geographical diversification benefits of new wind to be accurately measured and thus quantified the contribution that wind could make to security of supply. This is combined with historical demand and plant outage data from National Grid to enable a comprehensive analysis on the risks to GB’s security of supply.
The UEM can provide single-point estimates of key security metrics Loss of Load Expectation (hours) and Expected Energy Unserved (MWh) using a probabilistic calculation. It can also be run stochastically to provide an understanding of the uncertainty around these metrics and produce information on the probability, duration and severity of the security events.
The LCP model has been used by DECC in its analysis on system security and supported its policy design decisions on the Capacity Market (CM). The model has also been integrated into DECC’s Dynamic Dispatch Model (DDM), where it is used to dynamically determine the annual capacity auction targets.
In addition, the model is now used by National Grid for its annual analysis to support recommendations on the CM volume to secure. This means that the model is ultimately used to determine how much generation capacity GB requires and therefore the volume of capacity contracts available.
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How we can help
We can help our clients with a wide range of issues from whole system modelling to individual power plant and policy impact analysis.
Strategic advice aimed at maximising the benefits and minimising the risks associated with the Capacity Market and Contracts for Difference.
We advise on the optimal dispatch of assets within the wholesale market, forward planning of maintenance activities and valuation of commercial upgrades to plant.
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.
We work extensively in the Irish market, providing market modelling and analysis to investors, generation owners and governments.
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.