Common use of REACTIVE POWER SERVICE Clause in Contracts

REACTIVE POWER SERVICE. In order to achieve these objectives, the Reactive Service component of the trial will be split into three “waves”. Before participating in the waves, Participants must complete a Mandatory Technical Trial (see section 3.3.1.1 Eligibility and timings). Wave 1 is predominantly aiming to trial the technical aspects of the Power Potential services and, through the trial, to allow participants to recover most of their upgrade costs. The Wave 1 Trial is split to allow technical trials that cover a range of network configurations and operating conditions. Before participating in the Wave 1 trial, Participants must complete a Mandatory Technical Trial. Wave 2 introduces competitive bidding between DER, with the volumes accepted by National Grid in line with actual system need, although volumes procured will not be used to secure the system. Wave 3 brings DER into competition with other market-based options available to National Grid. Only DER that are as cost-effective as other options will be accepted. DER will be competing with transmission-connected assets where multiple parties at multiple connection levels can fulfil a requirement. National Grid is entitled to secure the system using DER services during this wave. Reactive Service payments for DER will include: Participation Payments (linked to overall availability in Wave 1 of the trials), and Market Revenues (from payments for availability and utilisation during Waves 2 and 3). An overview of the key features of each Reactive Power trial wave is as follows: Table 1 Reactive Power trial structure Wave Funding from Participation payment Availability payment policy Utilisation payment policy 1 Project budget Up to [£45,000] per site, linked to availability1 No payments No payments 2 Project budget N/A Driven by market bids Driven by market bids 3 National Grid budget N/A Assessed in line with other market based options 1 See section 3.3.1 for details of the availability assessment

REACTIVE POWER SERVICE. In order to achieve these objectives, the Reactive Service component of the trial will be split into three “waves”. Before participating in the waves, Participants must complete a Mandatory Technical Trial (see section 3.3.1.1 Eligibility and timings). Wave 1 is predominantly aiming to trial the technical aspects of the Power Potential services and, through the trial, to allow participants to recover most of their upgrade costs. The Wave 1 Trial is split to allow technical trials that cover a range of network configurations and operating conditions. Before participating in the Wave 1 trial, Participants must complete a Mandatory Technical Trial. Wave 2 introduces competitive bidding between DER, with the volumes accepted by National Grid in line with actual system need, although volumes procured will not be used to secure the system. Wave 3 brings DER into competition with other market-based options available to National Grid. Only DER that are as cost-effective as other options will be accepted. DER will be competing with transmission-connected assets where multiple parties at multiple connection levels can fulfil a requirement. National Grid is entitled to secure the system using DER services during this wave. Reactive Service payments for DER will include: Participation Payments (linked to overall availability in Wave 1 of the trials), and Market Revenues (from payments for availability and utilisation during Waves 2 and 3). An overview of the key features of each Reactive Power trial wave is as follows: Table 1 Reactive Power trial structure Wave Funding from Participation payment Availability payment policy Utilisation payment policy 1 Project budget Up to [£45,000] 45,000 per site, linked to availability1 No payments No payments 2 Project budget N/A Driven by market bids Driven by market bids 3 National Grid budget N/A Assessed in line with other market based options 1 See section 3.3.1 for details of the availability assessment