The UK, like other countries around the world, is having to evolve its networks to support the energy transformation. An added requirement is that the distribution network operators (DNOs) transition to distribution system operators (DSOs) as they take a more active role in managing local electricity generation and use.
At the forefront of this effort is the transmission and distribution industry body Energy Networks Association’s (ENA) Open Networks project. Now entering its second year, the comprehensive work programme will be crucial to defining the models on which the future market will be based.
The project is described as “laying the foundations of a smart energy grid in the UK” and key is the enablement of markets for flexibility. It involves not only the operators but also academics, government and other participants.
Implementation of DSO functionality
The general scope of the second phase is focused on the early implementation of DSO functionality for distributed energy resource services and whole system investment, and analysis and trials to develop the preferred DSO design(s).
The work programme comprises five workstreams with no less than 29 project deliverables. These include advancing transmission-distribution investment and operational processes and improving information for customers to support network connection and service provision. DSO functionality development and modelling will take place and initiatives on network charging will be supported.
According to the phase two consultation document, the programme is planned to engage around twice as many network operator resources across the different workstreams and products as in phase one.
Key to the programme is the project innovations being undertaken by the individual network operators. In addition, three new projects approved as part of Ofgem’s 2017 Network Innovation Competition will be used to trial aspects of the work.
The Fusion project proposed by northern DNO SP Energy Networks is aimed to demonstrate the Universal Smart Energy Framework as an approach for DNOs to harness flexibility to manage networks.
Western Power Distribution’s Electricity Flexibility and Forecasting System project will develop and trial a load forecasting tool to identify long and short-term need for flexibility services and where these may be provided.
The Transition project by Scottish and Southern Electricity Networks will design and demonstrate tools needed to deliver the market models for accessing flexibility.
“It is about creating a system that creates a platform for a whole range of new energy technologies and services,” says ENA CEO David Smith, of the commitment of the UK network operators to deliver the new energy market. “(These) not only allow network companies to manage the system more effectively but give other organisations the chance to benefit from that, whether that be directly or indirectly.”
DSO market models
The DSO model will be fundamental to the market that evolves and two models were developed in phase one.
In the ‘DSO coordinates’ model, services connected at distribution level are procured via DSOs, whether required at transmission or distribution level.
In the ‘joint procurement and/or dispatch’ model, the TSO (National Grid) and DSOs independently procure services but coordinate the scheduling.
Three additional models will be developed in phase two. The ‘price driven’ model, proposed by UK energy regulator Ofgem, will focus on price signals for usage of the network. The others are a ‘TSO coordinates’ model and a market facilitation model in which the functions are operated by an independent third party.
These will be subject to full analysis to determine a preferred model and the development of an implementation plan.
Alongside the Open Networks project, various of the UK DNOs have formally set out DSO transition plans, including Western Power Distribution and UK Power Networks, while Northern Powergrid is already on its way with its Smart Grid Enablers project.
UK Power Networks has also become one of the first to tender for flexibility, seeking to procure up to 35.4MW at ten network locations. As part of this initiative, the company is partnering with energy company Open Utility to test its Piclo matching platform as an online transactive marketplace for local flexibility trading.
A 2016 study from the Carbon Trust and Imperial College estimated the potential benefits of a smarter, more flexible system with the use of flexibility markets in the UK in the range from £17-40bn by 2050.
The innovation projects themselves are expected to deliver £1.7bn in benefits by 2031, according to management consultants Pöyry.
With the anticipated completion of phase two of the Open Networks project, further phases will follow over the next five years with a focus on regulatory enactment through changes to allow implementation of the preferred market design(s) and further trials to test elements of the DSO functionality.
The Association also intends to up its engagement activities on the project to gain wider awareness and to ensure the widest stakeholder input.