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Northern Powergrid and SSE Networks plan transition to smarter distribution

Steve Rogerson
December 6, 2017



Two UK electricity distribution companies – Northern Powergrid and Scottish & Southern Electricity Networks (SSEN) – have announced plans to focus on customers as they transition to smart grids.
 
Newcastle-based Northern Powergrid announced a £1.9m customer-led distribution project to take a holistic view of how to increase the benefits of a future smart energy system, identifying how to accommodate large volumes of new technologies, such as local generation and electric vehicles, at least cost while at the same time enabling customers to earn income by selling energy or services to balance the network.
 
Researchers at the University of Bath and Newcastle University will develop models and laboratory demonstrations of distributed energy systems, local energy markets and network operations, tracking flows of energy, payments and information. This virtual system will enable them to explore different approaches, using data from real networks, and will allow them to develop strategies that may be used to coordinate network and market operations.
 
SSEN, which owns and operates the electricity distribution networks in central southern England and the north of Scotland, has published a report outlining its plans to move to a smarter electricity system.
 
This is part of its transition from what it calls a distribution network operator (DNO) to a distribution system operator (DSO). Alongside the report, SSEN has launched a consultation on its transition to a DSO and is calling on all those with an interest in the transition to a smarter electricity system to respond to the consultation.
 
One of the biggest changes in the energy system will be flexibility. Distributed generation, electric vehicles, demand side response and energy storage are transforming the sector, giving electricity users access to more products and services from a range of providers.
 
The report outlines the principles SSEN will adhere to in its transition from a DNO to a DSO, and what that means for its wider network and its customers.
 
The five key principles in the report are:
1. DSO must work for all customers. SSEN wants greater choice and opportunity for customers, while ensuring the service it provides remains reliable, efficient and resilient, particularly for vulnerable customers.
2. Learning by doing will give the best outcomes for customers. SSEN has a wide portfolio of projects that test the credentials of new technologies with respect to de-carbonisation, resilience and affordability. The best outcomes for customers will be realised through listening to their needs, practical evaluation and scaling up success.
3. The transition to DSO must be coordinated and cost efficient. SSEN will use its experience to focus on ensuring that the total costs charged to its customers are fair and proportionate to the benefits, all the while listening to customers' short- and long-term needs. With regards to access for services, the standardisation of procurement and service arrangements will make it simpler to participate, and should ensure that the interests of GB consumers are protected.
4. Neutral facilitation is paramount. As a DSO, SSEN will embed flexibility to improve the operation of its network. It will facilitate local and national markets by identifying and providing the visibility necessary to allow markets to function and trade energy throughout the network. This responsibility hinges on expert neutrality, meaning the DSO must provide a level playing field for all technologies to engage.
5. The DSO should unlock local services. SSEN aims to remove any barriers and empower local services in a way that benefits the whole system to reduce losses, improve network utilisation, decarbonise and provide economic stimulus. SSEN will work with other actors in flexibility markets to allow this aspiration to become a reality.

The operator is now seeking views from a broad range of interests, from industry and academia, to end users and consumer groups on its key principles and anything else it should consider as it continues to transition to a DSO. The consultation will help inform SSEN’s transition to a DSO, building on the five principles set out in the report.
 
“The transition to a DSO will fundamentally change the way we manage our local electricity networks, providing exciting new opportunities for customers and other stakeholders to change the way in which we use and transact energy at a local level,” said SSEN’s head of DSO and innovation Stewart Reid. “To help inform our transition to a DSO we are looking to consider views from all walks of life, particularly electricity consumers given the importance in getting this right for those who ultimately pay. We would encourage anyone with an interest in the transition to a smarter, more flexible electricity system to respond to our consultation with their views which we will look to consider as we continue our transition to a DSO.”
 
Patrick Erwin, policy and markets director at Northern Powergrid, added: “The transition to a reliable, cost-effective, low-carbon network offers huge opportunities for the economic prosperity of our region. We want to build this smart grid around the needs of our customers, delivering them the best service at the lowest possible cost. We want to support emerging energy markets where our customers can buy the services they need as cheaply as possible, and where they can sell services from solar panels, electric vehicles and home batteries that will help balance demand on the network and make it more efficient. Importantly, we also need to ensure the future system does not unfairly impact vulnerable customers.”
 
SSEN is responsible for maintaining the electricity networks supplying over 3.7 million homes and businesses across central southern England and north of the Central Belt of Scotland. It owns one electricity transmission network and two electricity distribution networks, comprising 106,000 substations and 130,000km of overhead lines and underground cables across one third of the UK.
 
Northern Powergrid distributes electricity to 3.9 million homes in the north east of England, Yorkshire and northern Lincolnshire.
 
The UK government has put up £8.8m in a competition to help smaller companies make better use of smart meter data so they can reduce energy consumption.