There has been no let-up over the past 12 months in the pressure on energy networks to innovate, evolve to undertake new roles and develop whole-system thinking. All the while, uncertainty has loomed over the industry as Ofgem, in partnership with government, has undertaken a series of significant reviews and consultations which are set to govern both the direction and means of travel.
The wait continues for a final route map from government on the next steps to a smart, flexible energy system which should remove barriers and ensure a wealth of innovative technologies and services deliver substantial savings to customers, improve reliability and support the move to low carbon.
Initial proposals indicate an increased focus on defining the role of distribution system operator (DSO), allowing energy networks to take the lead, with the help of the government, to direct the industry towards a whole-system approach and optimise efficiency collaboratively, outside of their own asset base.
In the meantime networks have been given the green light to continue innovating, albeit with a trimmed budget, to increase the focus on realising the benefits to consumers, and has signalled its intent to increase the competition and collaboration between networks and third parties in the near future.
This collaborative process will be required both within the industry to achieve a high-level whole-systems view, and at a local level to engage stakeholders to establish a multi-vector approach to achieving a secure, affordable and low carbon energy system. Such an approach will capitalise on emerging technologies such as electric vehicles, turning them from a potential threat to security, to an opportunity for increasing flexibility.
Ofgem has signalled its intent to move ahead with the system transition by splitting National Grid’s system operator role ready to impartially handle an increasingly complex and distributed system.
Whether it will be in sharing ideas, funding initiatives or cross-vector projects, network operators must move now to address the challenges facing the sector and shape a future network that places customers at its heart.
The third annual Future Networks Conference, sponsored by Schneider Electric and Capula, will provide a platform for leading speakers from industry and government, exploring the challenges ahead. Delegates will gather in Birmingham on 21 March to hear from a wide spectrum of speakers from the industry covering system operation, innovation and system architecture. Representatives from the Department for Business, Energy and Industrial Strategy and Ofgem will also divulge the intended direction of travel.
Ahead of the conference, three of the speakers unpick the topics they will be covering (facing page).
Stewart Reid, head of asset management & innovation, SSEN#
Ofgem has stated it wants more innovation that has been funded through the Network Innovation Competition to be adopted as business as usual (BAU). How effective is the funding in achieving that conversion to everyday practice?
“There is a limit to how much you can learn in an innovation-funded environment. Things like commercial risk and contractual risk are distorted by innovation funding. Deploying things into BAU requires a different set of criteria than what funded innovation projects are measured against, and as a result you get different types of outcomes.”
How much of a challenge will it be to move from innovation to BAU?
“There are a whole range of challenges from changing internal views to presenting business cases. It’s about new ways of working, new skills in the industry, and about businesses taking on the risks that they have never experienced before and how you actually go about quantifying these risks and presenting them in a language that a business can understand.”
What are the next steps for moving into BAU?
“It’s not a big bang approach that is needed. Innovations that we are working on at the moment don’t necessarily work in all parts of the country in all scenarios at once. One of the key things we have to acknowledge with smart solutions is that there will be certain parts of the network where there is more stress and differing socio-political factors and topography. This means solutions work in one place but not at all in another. So we have to accept that innovation needs to grow geographically.”
How does innovation need to change to adapt to decentralisation and how difficult will this be for network operators?
“Here, complexity is the issue. We need to find ways in which the scale of the complexity can be kept manageable. If you are managing locally and innovating locally then the number of permutations you end up with very quickly get into 100,000s. The question is how to make that manageable. At the moment, transformers in London are the same as those in Orkney, it’s a very standardised approach across the country, so what you are talking about is moving to a world where management by exception is going to be an absolute requirement.”
Richard Smith, head of network capability (Electricity), National Grid
In the changing energy landscape, how is the role of system operator changing?
“It’s changing with the shift towards digitisation, decentralisation, and decarbonisation. There is increasing penetration of embedded generation, more solar and storage, and the nature of demand is also shifting.
“This all affects how the system works. That leads you into things like needing new services to manage that to the same level of security that we have had in the past. The emergence of distribution system operators is a part of that decentralisation and will help provide those new services.
“On top of that there is a move towards competition in the transmission system.”
What is National Grid doing to address those challenges?
“There is a host of different ways of operating that we will need to consider. In our system operability framework, we set out several hundred pages’ worth of things that need to be considered, some of them you can call challenges and some you can call opportunities and I hesitate to refer to them as either specifically.
“There are many interesting meaty and specific technical innovations going on. We have just been awarded funding for our Network Innovation Competition project TDI 2.0. It will look very specifically into the distribution system’s transmission interface and how it needs to evolve. The project is being carried out jointly with UK Power Networks.”
What is the future of the network system over the next 5-10 years?
“Decarbonisation will continue, decentralisation will continue over the next few years, we should expect to see within the industry more testing of different solutions as to how we manage the power system at all levels. More experimentation in how we deliver efficient and economic solutions that don’t affect consumers.”
Paul Bircham, networks strategy & technical services director, ENW
When networks talk about behaviour change, what do they mean?
“Electricity North West conduced a three year study, known as the Power Saver Challenge, into the feasibility and demonstration of engaging consumers to change their energy consumption behaviour and thereby avoid the need for costly and disruptive network reinforcement. The project was a success and the final report will be published shortly. This demonstrates that a 4 to 5 per cent sustainable reduction in peak electricity demand can be achieved. The project also showed that to secure and utilise a behavioural change by customers, significant behavioural change is required on the part of the DNO too.”
How hard will it be to change the behaviour?
“The success of the project shows that behavioural change by the DNO and its customers is difficult but achievable.”
Is there enough time for the DNO to adapt to the EV transition, whenever that might be?
“My belief is that the EV transition will be the next rapid change in the journey towards a low carbon economy. However, there is sufficient capacity in the current distribution networks to support the initial rollout of several million EVs. This fact, coupled with the ability of other innovative developments, including the development of the distribution system operator role, will provide sufficient time for DNOs to undertake the necessary adaptation to ensure that the EV transition is achieved.”
Are we all working towards the same model of DSO?
“The concept of the DSO is in its early stages and, consequently, there are many differing views of what the role entails.
“I am confident that a well thought through DSO model will emerge. How quickly this can be achieved is a different challenge.”
Delegates last year said:
“Fantastic speakers and very good audience. Perfect.”
Network planner, SSE Power Distribution
“Very informative and well catered for in content.”
Head of land and property, Green Frog Power
“Interesting topics by enthusiastic speakers.”
Innovation implementation engineer, ENW
“Informative and inspiring to see such a vast demographic of interested parties.”
Regulation & strategy head, National Grid