Scottish and Southern Electricity Networks (SSEN) has commissioned Frontier Economics to devise a new process for comparing the cost of flexibility services versus network reinforcements.
The method will enable SSEN to become a “neutral market facilitator” as part of its ongoing transformation into a distribution system operator (DSO).
In the face of great uncertainty, Frontier Economics has been tasked with developing a decision-making framework that properly captures the value of flexibility services in terms of optionality.
Dan Roberts, a director at the consultancy, said: “Exploiting the value of flexible resources will be critical as the sector evolves.
“As the scale and diversity of flexibility available increases, making sure we only commit to long-lived investments when other alternatives have been properly considered will be critical to providing cost-effective solutions for customers.
“Building real-world uncertainty into robust decision-making frameworks is essential in this regard.”
SSEN distribution systems operations director Andrew Roper said: “This work will establish a transparent and robust methodology for selecting between conventional asset-based solutions, flexible and other smart solution investments.
“This represents SSEN going further than merely an audit process, but ensuring the methodology used to judge flexibility is robust.”
Last month SSEN announced plans to begin procuring flexibility services across its entire network following the success of a trial limited to a small number of areas.