The engineering standards for the electricity system should “start off with customers” rather than being “written by industry people for industry use”, the chair of a review panel has argued.
Simon Harrison is the group strategic development director for Mott Macdonald and recently chaired an independent panel convened by the Department for Business, Energy and Industrial Strategic (BEIS) and Ofgem to review engineering standards for electricity, which published its findings in December.
The panel noted a number of problems with the current arrangements, including that the landscape is larger and more complex than necessary; that there are critical gaps around interoperability, data and operations; and that change processes lack agility.
However, the main overarching issue identified by the review is that standards are focused “too much on how things are done, rather than what should be achieved for customers”. It said “the opportunity to provide to provide a better and more customised service at lower cost is being missed” and that standards needs to recognise “the value different customers place of supply reliability”.
“We’ve moving to a much more digitalised electricity and energy system and that presents a whole bunch of opportunities as well as challenges, and at the moment the engineering standards landscape doesn’t really press those,” Harrison told Utility Week.
“Currently, the system of standards is industry-centric,” he added. “It’s written by industry people for industry use and it puts the technical needs of the industry first, whereas what we think is that should start off with customers and articulate what customers should be able to expect and what they are obliged to do, and then build the frame of standards off that so you’re actually focused on the end outcome rather than on the network.”
Among the specific recommendations made by the panel is that the Value of Lost Load, a measure of how much network users would be willing to pay to avoid an outage, should be reassessed to take into account how different customers may value reliability for different devices.
Harrison said making the Value of Lost Load more “granular” could open up “a whole new way of thinking about what network services people need”, enabling them to be managed “a very precise and dynamic way at the level of individual customers or even devices”.
“If you have a customer Value of Lost Load where certain high load items – and the obvious example would be an electric vehicle charger – that are quite tolerant to lost loads for periods of times, that potentially has quite big implications as to how you might then go about reinforcing networks,” he explained.
Customers willing to accept a lower level of reliability could be offered lower cost connections on this basis.
The panel also called for the removal of the voltage limits that have been “essentially unchanged for over 80 years, in which time the voltage tolerances of devices has improved dramatically.” It said the “strict application of these limits is likely to drive significant unnecessary reinforcement or other mitigating actions” costing billions of pounds.
Harrison said these limits are set in legislation – something the panel saw as “anomalous” – but should instead be left to networks companies and stakeholders to “work through together to reflect individual circumstances.”
It additionally suggested that new or refurbished circuits are sized to reduce network losses where they would be more costly than higher capacity assets.
“If you’re doing something new and you’re to be putting some new copper in the ground, then size that not for the load but for the losses,” Harrison explained. “And that does two things. Firstly, it reduces the losses, which is economic… But what is also does is then give you some built in headroom for load growth.”
The panel said enacting its recommendations could avoid one-off costs £5-10 billion and a further £2-6 billion annually. But Harrison said these would only be achieved with accompanying reforms to energy system governance. Responding to Ofgem’s review of energy system operation, he said “shaping the architecture of the system… that’s part of the story here”.
BEIS will be holding a formal launch event for the review on 5 March 2021. You can register for the event here and read the panel’s report here.