Regulatory frameworks and market integration for assets under non-firm grid connection

Introduction or Background

 

As part of the energy sector’s evolution towards decarbonisation, there has been an increased focus on integrating new energy resources, including renewable generation and storage, into existing power grids. Whereas traditional firm grid connections can be long and expensive processes, non-firm connection, allowing assets to connect without guaranteeing full-time access but still participate in electricity markets, often offers a more flexible and cost-effective alternative.

 

Given the increasing adoption of Distributed Energy Resources (DER) and the transition to net-zero energy systems, it is crucial to design regulatory frameworks that allow non-firm connected assets to operate efficiently. The Working Group C5.39 was created in this regard, to inform regulators and utilities on challenges and best practices of non-grid connection policies.

 

Figure 1: Non-firm grid connection

Aim & Purpose of Working Group

 

Existing Working Groups, such as CIGRE WG C5.22 (Mitigating systemic market risk in electricity markets), have highlighted the need for more flexible integration strategies. The Working Group C5.39 aims to deep dive into regulatory practices for non-firm grid connection, and:

 

• Enhance regulatory understanding: Provide a clear framework for integrating non-firm connected assets into energy markets, reducing uncertainty for investors, operators, and regulators;
• Optimize market signals: Propose mechanisms to use market signals, including market and grid data, effectively, ensuring that non-firm assets are dispatched in a way that maximises grid stability and market efficiency;
• Support Net Zero goals: Facilitate the large-scale adoption of DER technologies and large-scale assets to meet decarbonisation targets while ensuring the stability of the grid. 

 

This Working Group will address these challenges and recommend regulatory and market solutions that ensure an orderly and efficient transition to a decarbonised energy system.

 

Scope

 

The Working Group C5.39 will investigate regulatory practices and market integration strategies for assets operating under non-firm grid connection, including renewable energy assets, battery storage, industrial loads, and generation systems, into the grid. Non-firm grid connection may be associated with conditional curtailment in real-time or limited access during pre-determined grid congestion or instability periods. This concept aligns with the growing flexibility demand in modern grid operations, where intermittent renewable generation must coexist with traditional grid infrastructure. Given the significant infrastructure requirements, it also facilitates the utilisation of existing transmission and distribution grids.

 

The WG will focus on the following key areas:

 

1. Review and Assessment of Non-Firm Grid Connections Practices:
   • Gather case studies from regions implementing non-firm grid connections, including the UK, Australia, Ireland, and other jurisdictions adopting similar practices identified with an international survey.
   • Investigate the different operational strategies and regulatory mechanisms that permit such assets to participate in energy markets.
2. Regulatory Framework Development:
   • Examine how existing market structures and regulations impact non-firm connected assets, especially in deregulated markets.
   • Highlight best practices regarding regulatory reforms that ensure fairness, economic efficiency, and flexibility for all grid participants while ensuring reliability and security of supply.
3. Market Mechanisms for Integration:
   • Explore the role of market signals and pricing mechanisms, including data availability, in optimising non-firm connected assets.
   • Assess how non-firm connections interact with balancing services, ancillary markets, and congestion management strategies.
4. Challenges in Curtailment/Limitations and Compensation Mechanisms:
   • Investigate mechanisms for compensating assets curtailed due to non-firm status and propose solutions to maintain investor confidence and operational viability.
   • Address the financial, legal, and technical challenges assets that operate under these conditions face.
5. Future-Proofing for Net Zero:
   • Assess the role of non-firm grid connections in supporting the transition to a net-zero energy system.
   • Identify how non-firm connection models can be scaled to support large-scale DER integration, particularly as part of distributed and decentralised energy systems.

Conclusion

 

The WG C5.39 started in November 2024 and is recruiting members by January 2025. It will then focus on designing innovative regulatory and market solutions for non-firm grid connections. By addressing key challenges such as curtailment, market integration, and future-proofing, the group aims to accelerate the energy transition toward a net-zero future. The WG’s collaborative efforts will result in the development of standardised practices and mechanisms to support the integration of DER on a large scale. The outcomes of this WG will provide a clear framework for the energy sector, ensuring flexibility, stability, and sustainability. By harmonising market and regulatory models, the work will pave the way for an efficient, reliable, and economically viable future energy system.