How the state provides incentives or ‘stimuli’ for the development of highly manoeuvrable generation (HMG). Part 2

How the state provides incentives or ‘stimuli’ for the development of highly manoeuvrable generation (HMG). Part 2:

The optimal market for HMP operation is the ancillary services market (ASM). That is, the market where shunting generation and SPG are needed to maintain/restore frequency. And frequency is a key factor in electricity quality.

Until mid-2023, an essential condition for certification to operate in the DSO market was the capacity of the facility - from 20 MW. Almost a year since this condition was changed! Now any plant from 1 MW can operate in this market. This is a really good step towards distributed generation!

But how much capacity is needed in the DG market? What is the required volume?

We read an interview with Mr Volodymyr Kudrytskyi (before the destruction of the Trypillia TPP) and see a table showing the need, namely, UZE - 0.8 GW and VMG - 1.4 GW. And that's good, the investor will say - there is a market.

Then we open the official requirements for the required reserve volume on the official website of NPC Ukrenergo: and we see that the required volume in the state-owned electricity market has hardly changed since 2021. That is, officially, the state needs frequency support tools (VMG and UZE) even less than in 2021 and the need is the same:

- The volume of the frequency support reserve (FSR) is 99 MW. This is the market for the operation of the UZE.

- The volume of frequency restoration (FR) is 1000 MW for grid loading and 421 MW for grid unloading. Assuming that this market is ‘empty’, the maximum market volume is: 421 MW of UZE and 579 MW of VMG.

- We do not consider the replacement reserve, since technically and economically, VMG and UZE cannot operate in this market.

Once again, under ideal conditions (no operating plants), the maximum volume is currently 1099 MW.

It can be said that VMG and UZE can operate in other markets, not just the SOE market. For example, there is the Balancing Market, DAM, SPPs + SPPs, etc. But there is no payback there, firstly. And secondly, it is enough!

We believe that it is necessary to move from words, even correct ones, to actions and officially increase the required reserve volume and specify exactly how much UZE and how much VMG is needed in this market! This is necessary for investors to understand the rules of the game and for the state policy in the energy sector to finally start changing.