Providing a flexible solution to the UK's Energy needs
Providing a flexible solution to the UK's Energy needs
WHO WE ARE
The Flexible Generation Group (FGG) represents the owners of and investors in small scale, flexible power generation. This new and innovative group of companies owns and operates approximately 800 MW of generation on the UK electricity system.
Its members include:
Infinis Energy, Welsh Power, Noriker Power Ltd, Forsa Energy, Conrad Energy, Gresham House and Whitetower Energy Limited.
Mission
Mission
We believe that moves by Ofgem and the “Big Six” energy companies to change longstanding regulatory provisions limit competition, increase costs to energy consumers and threaten security of supply.
Changes to Embedded Benefits currently being introduced by Ofgem stand to impact the market, making it more difficult for new market entrants to compete. They have already severely undermined investor confidence.
Peaking power plants are enablers, providing a flexible solution to the UK’s energy needs, benefitting consumers and ensuring security of supply by bringing in new investment. We believe that any changes should be addressed as part of a holistic review of network charging, rather than through a piecemeal approach which threatens the viability of small businesses like ours.
The process through which regulatory changes have been introduced is flawed and demonstrates the undue influence of the ‘Big Six’ on regulators and policy makers. We are concerned at how large generators proposed changes to the rules for charging to transmission access through the CUSC (Connection and Use of System Code) Panel and then voted on them as the majority members. Through these governance structures they were able to convince Ofgem to proceed at the expense of consumers, who will be subject to higher energy costs and lower security of supply should these changes be implemented.
The pace and magnitude of changes to charging arrangements that Ofgem is driving is not appropriate for long-term infrastructure investments. New entrants to the energy market will now be unable to raise the capital required to get projects off the ground, cost of capital will increase across the board for new electricity generation projects and existing projects will struggle to re-finance. There is a clear perception that these changes are being driven by large, established generators to stifle competition.
About
About
The Flexible Generation Group (FGG) represents the owners of and investors in small scale, flexible energy generation. This new and innovative group of companies owns and operates approximately 800 MW of generation on the UK electricity system. Its members include Infinis Energy, Welsh Power, Noriker Power Ltd, Forsa Energy, Conrad Energy and Whitetower Energy Limited.
What we do
At present, small embedded generators are delivering the lowest cost new generation capacity to Britain. We can efficiently provide fast and flexible services to the grid that complement government’s policy of building intermittent renewables and base load nuclear. We have been – and will continue to be – part of the UK’s energy mix and its infrastructure, benefitting consumers and ensuring security of supply.
As new entrants into the energy market, we have been good for consumers by ensuring security of supply and keeping costs down. For example, we are reducing the peak pricing of energy during the winter peaks because we are fast acting and can be up to full load from a standstill in seconds. The efficiency and responsiveness of our plants means the energy they produce is faster and cheaper.
Generating energy as close as possible to where it is used represents a significant saving to the consumer, especially during peak periods of demand. This reduces the need to invest in highly expensive transmission infrastructure and to build more pylons across AONB, green belt and other countryside.
Why we exist
Many of the traditional power stations connected to national grid are coming to the end of their lives. The peak demand supplied by the national grid is about 50,000 MW. Of the generation currently meeting this demand much is expected to close over the next few years including about 13,500 MW of coal fired generation (As former Energy Secretary, Amber Rudd announced that she wanted coal generation to close by 2025 and BEIS is currently consulting on how to achieve this). A further 8000 MW of nuclear plant appears likely to come to the end of its life in the 2020s.
Nothing would be more damaging to the transition to a low carbon economy than if we have problems with security of supply. Small-sized flexible generation can help provide that certainty. It can act as the transitional ‘parachute’ when other technologies fail - or then the wind doesn’t blow and/ or the sun doesn’t shine.
Peaking power plants provide key services to National Grid and they need plant that is extremely fast responding and flexible to be able to generate power within seconds if, for example, a plant elsewhere on the system ware to fail. It must also be highly reliable – as times of system stress it is critical that this kind of plant can be trusted to run. We are developing sites that can accommodate either gas, storage, diesel or even biodiesel generation.
Peaking power plants are impacting upstream/ generation in a comparable way to how small domestic energy suppliers have tried to break the stranglehold of vertically integrated companies/ large suppliers.
We strongly support the Government’s vision of a smarter and more flexible energy system.
Traditionally the vast majority of Britain’s electricity came from large coal, gas, oil and nuclear power stations connected to the national grid and operated by the “Big Six generators”. Current government policy is to replace this generation with low carbon generation, typically intermittent renewables like solar and wind, but also new base load nuclear generation like Hinkley Point C. These projects are generally underwritten with long term offtake agreements called CfDs. However, these projects may not be sufficient to meet Britain’s capacity needs and in 2014 the government introduced the Capacity Market where the government buys sufficient extra generation to ensure that there is enough capacity to meet peak demand and keep the lights on.
The Capacity Market is technology neutral and allows investors to maintain existing plant (via one-year rolling agreements) or develop new plant (given 15 year agreements) and is a highly competitive process. Peaking power plants compete to deliver the flexible services that the National Grid Company (the operator of the transmission system) needs, driving down the cost of these services to the benefit of customers.
The old model of large scale centralised power stations selling power to passive consumers, and being paid to be around for the tea time peak in demand, is outdated as consumers become more engaged in their energy usage. According to research by Imperial College and The Carbon Trust, there are significant savings to be had from operating a more flexible decentralised system (they suggest up to £40bn by 2050), and small-sized flexible generation assets provide "cheaper" and more "cost effective" solutions to ensure security of supply in the UK electricity market and provides an option value that will be necessary to cope with the increasing penetration of renewables.
We believe that this transition will need a range of technologies to meet the UK’s electricity demand and ensure security of supply - including demand side response, solar, storage and small-sized flexible generation. FGG member PeakGen is putting this into practice, for example, by developing storage options to complement our existing small sized flexible generators.
Our place in the UK Energy Market
Membership
Membership
These organisations are members of the Flexible generation group
Welsh Power
Welsh Power is an independent developer and asset management business. Welsh Power manages over 550MW of flexible generation and is the UK’s leading independent provider of grid stability services. Welsh Power’s asset management activities cover development, funding, construction, operation, financial management and optimisation of assets.
Noriker Power
Noriker Power develops and optimises rapid response, flexible power systems which deliver services such as frequency control and stability to National Grid. These facilities and services are a major component of the future control infrastructure of the grid, and aim to address the problems caused by the decommissioning of old power stations, decarbonisation of electricity production, and the transition to renewable energy. The UK power market is undergoing a rapid transformation due to increased renewables and continuously shifting regulation. Noriker has proved a resilient player in the industry, and adept at participating in new opportunities, through innovation and technology.
Conrad Energy
Conrad is a new independent power producer focused on highly flexible small-scale embedded peaking generation and energy storage facilities in the UK at the 11kV and 33kV level. Conrad installs reciprocating gas engine plants and storage facilities up to a maximum of 20MW dependent on available grid capacity. Conrad targets peak pricing arbitrage power offtake contracts alongside other ancillary services markets including from the UK government’s Capacity Market auctions. We have a growing and diverse portfolio of flexible generation and energy storage across Great Britain, powering the equivalent of over a million homes; alongside a significant development pipeline covering solar, storage, hydrogen and more.
Forsa Energy
Forsa Energy is an energy company which develops, builds and operates energy assets across Europe. We are backed by global energy and power-focussed private equity firm Tiger Infrastructure Partners, with a strong mandate to grow a portfolio comprising renewable generation, gas generation and energy storage. In GB we operate 170MW of Reserve Generation Sites with a further 225MW contracted and in construction or advanced development, and a further development pipeline of ~400MW of reserve generation and storage sites.
Whitetower Energy Limited
Whitetower Energy is an energy company based within the UK, currently operating ~600MW of gas OCGT and reciprocating engines. Backed by American investment company, Rockland Capital, we are tasked with increasing efficiency of our units and providing a stable service to support the electricity system.
Infinis
Infinis is the UK’s leading generator of low carbon power from captured methane. The business is developing over 1GW of UK solar and battery energy storage systems (BESS) projects, with 100MW of new solar schemes constructed in 2022-23. New projects in development, combined with existing power response assets, will deliver a flexible generation portfolio of c200MW. Capacity market contracts and other national grid contracts underpin flexible generation market performance.
Gresham House
Gresham House Energy Storage Fund plc (GRID) is a London Stock Exchange listed Investment Trust which invests in a portfolio of utility-scale operational battery energy storage systems (BESS). GRID is a leading owner of operational BESS. These store excess energy generated by renewable energy sources and then release that stored energy back into the grid during peak hours when there is increased demand.