A smarter, more flexible power grid will be essential to transforming the energy system at the lowest cost to consumers. The potential benefits amount to between £17 billion and £40 billion by 2050, according to the smart systems and flexibility plan unveiled by the government and Ofgem in June.

Key to securing these benefits will be the Energy Networks Association’s Open Networks Project which published its first end of year report in December. With the industry-wide initiative now entering its second year, Utility Week looks at the plans for 2018.

The project is separated into four main work streams: interactions across distribution and transmission; the customer journey; the evolution of distribution network operators (DNOs) into distribution system operators (DSOs) and network charging.

Open Networks timeline

Working together

Sotiris Georgiopoulos, head of smart grid development at UK Power Networks, is in charge of the first of these work streams, which in 2017 focused on reforms to connection arrangements at the distribution level.

Before offering connections to customers, DNOs previously had to establish the impact on the transmission network by requesting a statement of works from the transmission system operator (TSO) at National Grid. The process often led to delays and the imposition of conditions.

A simpler process has now been developed to improve the experience for customers. By working with the system operator to work out in advance where constraints on the transmission network will limit connections to distribution networks, DNOs are now able to offer connections without having to request a statement of works.

“The ability of distribution companies to give that kind of clarity and visibility at the point of application relies on a continuous loop of data between transmission and distribution companies that didn’t exist in the past,” says Georgiopoulos.

The new process underpinned UK Power Network’s launch of an active network management scheme in June which enabled customers to access flexible connections to avoid paying and waiting for costly grid reinforcements.

The work stream’s main task for 2018 will be monitoring rollout of flexible connections and taking in feedback from customers. “Does this this work? And if not, what areas do we need to improve?”, he asks.

It will also examine whole-system investment planning and expand visibility over the distributed energy resources connected to the power grid, which has hitherto been lacking.

What customers want

The second work stream, centred on the customer journey, spent the last year listening to customers to gain greater knowledge about who they are and what they want.

Jim Cardwell, head of trading and innovation at Northern Powergrid, says in 2018 that learning will be used to establish “what good practice throughout the connection process should look like, including what data and information is available and what kind of technical and commercial expertise needs to be provided to customers at different stages.

“We will also be bringing greater clarity on aspects like standard terminology; what levels of constraint apply to un-firm connections; how interactivity between connection applicants is managed; and how networks manage capacity usage and availability.”

The transformation of the energy system will provide an opportunity for customers to get paid for providing flexibility. Cardwell says a priority for the work stream over the next year will be learning more about the information customers will require to participate in the new markets.

He continues: “This understanding will lay the foundations for development of the market today and assist with the standardisation of interfaces with the different network businesses, with the aim of making it simpler for customers to engage to trade their flexibility with multiple parties.”

The DSO transition

The creation of markets for flexibility is a major pillar of the transition towards a DSO model – the focus of work stream three. Its achievements in 2017 included establishing a definition for DSOs based around eight key functions.

Using this definition as a starting point, the work stream developed and consulted on a number of potential models for DSOs, settling on three different options – a DSO-led model, a joint procurement model, and a market-led model.

In 2018, the models will be put out to consultation and analysed to establish their costs and benefits. Energy Networks Association head of innovation and development, Randolph Brazier, says this evidence will then presented to Ofgem, which will “ultimately make a decision on what the market or the DSO will look like going forward”.

The elements of the DSO models which are common to all three, and can therefore be implemented immediately, will also be identified.

The work will be supported by multiple innovation trials, including three which won funding in the latest annual Network Innovation Competition – Transition by Scottish and Southern Electricity Networks, Fusion by SP Energy Networks and Electricity Flexibility and Forecasting System by Western Power Distribution.

Brazier notes that the funding is conditional on three winners working together to avoid any wasteful overlaps: “Under Open Networks, we’re looking at the scopes of those three projects and lining them up as much as possible.”

He says the numerous smaller Network Innovation Allowance projects being undertaken by networks, most notably Northern Powergrid’s trial of a “virtual” local energy market, will similarly be aligned to prevent overlaps.

Network charging

The last of the four work streams, concerning network charging, is headed up by Paul McGimpsey, lead analyst at SP Energy Networks. He says its purpose is to support the other work streams in the Open Networks Project which will doubtless require changes to charging arrangements to achieve their aims.

The last year was spent analysing common principles and approaches to charging across transmission and distribution; how they could potentially change in future; and where there is potential for conflict. “We were really looking at how potential differences in the charging arrangements might actually influence a customer’s economic decision as to where they connect on the network,” McGimpsey tells Utility Week.

In 2018, the work stream will support Ofgem’s efforts to overhaul connection and charging arrangements as outlined by the regulator in November. “We are supporting, from a networks perspective, the Charging Futures Forum and the access and forward-looking charges task forces that are now in place,” he adds.

Brazier is keen to emphasise that the plans for the Open Networks Project over the next year are not yet set in stone. The ENA will be launching a consultation on the plans in the coming weeks.

“We’re essentially saying, ‘look this is what we think we should be focussing on this year, but what does the industry want us to focus on’,” he remarks. “Are we looking at the right areas; are there things we need to speed up; are there things that are missing?”.

Whatever the outcome, 2018 looks set to be a busy year.