Backcasting the GB Balancing Mechanism with BID3
Backcasting, the comparison of modelled outputs to historical outturn values, is a wellestablished method of testing the performance of models. National Grid ESO and AFRY have worked together to undertake such an exercise with BID3, using the SO’s knowledge and understanding of the Balancing Mechanism and Pöyry’s expertise in BID3 modelling and backcasting.
National Grid, as the GB System Operator (SO) holds an important role in coordinating the planning of future transmission network investment. As part of this responsibility, a thorough understanding of the costs that will be incurred on the consumer’s behalf in managing and reinforcing the system is indispensable; however, these costs are driven by an electricity market that will continue to undergo rapid and not necessarily predictable change for the foreseeable future.
To facilitate prudent investment decisions, the SO forecasts the future market under a range of scenarios (the Future Energy Scenarios), the network congestion that will arise under each of these with various future network designs, and the cost of managing this congestion (known as constraint cost). This view of credible futures and how different levels of network investment affect constraint costs allow us to manage risk to ensure the GB consumer is not exposed to unnecessary costs, whilst maintaining a secure network for the coming decades.
A key factor in the reliability of National Grid’s forecasts, and thereby the proposed recommendations, is the quality of tools which underpin it. Since 2016, the main modelling platform used by National Grid has been Pöyry’s BID3. As the SO’s view of constraint costs drive such important network investment processes as the Network Options Assessment, Strategic Wider Works Assessments and Connection Infrastructure Options Notes, a high degree of confidence in the model’s outputs is vitally important. National Grid have therefore undertaken a range of assurance activities to ensure that their forecasts are robust and reliable as recommended by an independent audit.
In doing this, it has been shown that by entering historical inputs into BID3, the model can accurately replicate the historical outputs of the Balancing Mechanism such as constraint costs (as shown in Table 1). This shows that while there is inevitable uncertainty in the future of the GB electricity market, BID3 can be trusted to produce outputs that sensibly reflect the real market.
For more information, please see the report below
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