Current Landscape: Changes affecting Demand Side Flexibility John - - PowerPoint PPT Presentation

Agenda

Session 2:

Current Landscape: Changes affecting Demand Side Flexibility

Adelle Wainwright Jon Parker John Bryant

Adelle Wainwright Senior Commercial Lead

Wider BM Access

3

Roadmap published August 2018

Three main drivers for change Maintaining operability

• Third party studies report benefits of wider participation

in BM of £110-500m pa

Consumer benefits

• Distributed gen capacity could reach 67GW by 2050
• Upwards & downwards variable reserve requirements

may double by 2022

Removing barriers to entry

• Addressing the link between equal treatment and equal

access

4

How are we going to get there?

Improving existing routes to market (Aggregation via supplier) Creating new routes to market (Independent aggregation) Improving systems and processes

Wider BM Access

Our commitments

• 1. Increasing participation routes
• 2. Clearer accession requirements
• 3. Aggregated BMU participation in

balancing services

• 4. Improved & clearer comms systems

requirements

• 5. Simpler data submission process
• 6. Improved ESO ability to optimise &

dispatch aggregated BMUs

• 7. Clearer & simpler metering requirements
• 8. Support industry work on alternative PN

provision

• 9. Support industry work on behind the

meter settlement

5

Roadmap of BM access milestones – progress update

✓ ✓ ✓ ✓ ✓ ✓

6

Key next steps – systems and processes

The system change landscape is complex

We know that stakeholders are impacted by the changes we make, and are currently working to develop improvements in line with the roadmap. We plan to share our thinking and develop solutions in an agile way and over the coming months will engage & update stakeholders via

• IS change forum
• Dedicated webinars

7

Next steps – contracts and markets

Code changes – new route to market

• CUSC modification proposals

CMP 296 & 297 (facilitating modifications relating to establishment of Virtual Lead Parties) currently with Authority for decision

• CUSC proposal setting out

Virtual Lead Party contractual arrangements CMP 295 on track

• Follow up session on TERRE &

wider access joint with Elexon 11th December

• Potential further BSC

modifications following Issue 70 & 71

Balancing services contracts

• Further communication

due shortly

• Proposals will be
• utlined in relevant

Outline Change Proposal processes for each service

Now P344 & GC0097 have been approved we are currently working on ensuring consequential changes are made to CUSC and balancing services contracts

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Where can I find out more & get involved?

• www.nationalgrid.com/uk/electricity/codes/grid-

code/modifications/gc0097-grid-code-processes- supporting-terre

• For more info contact: Grid.Code@nationalgrid.com

Grid Code GC0097

• www.elexon.co.uk/mod-proposal/p344/
• For more info contact:

bsc.change@elexon.co.uk

BSC P344

• https://www.elexon.co.uk/mod-proposal/p354/
• For more info contact: bsc.change@elexon.co.uk

BSC P354

• https://www.elexon.co.uk/smg-issue/issue-70/
• https://www.elexon.co.uk/smg-issue/issue-71/
• For more information contact:

bsc.change@elexon.co.uk

BSC Baselining & Behind the Meter Issue Groups

• A monthly meeting covering all European legislation

issues (supported by BEIS, Ofgem, National Grid amongst others)

• Weekly Email Newsletter Update
• For more info contact:

europeancodes.electricity@nationalgrid.com

Joint European Stakeholder Group

• Fact sheets providing an overview on each EU code

are available on our website:

• www.nationalgrid.com/uk/electricity/codes/european-

network-codes?code-documents

ENC Fact Sheets BM access Qs: commercial.operation@nationalgrid.com IS questions: box.is.changeforum@nationalgrid.com Box.balancingprogramme@nationalgrid.com

nationalgrideso.com National Grid ESO, Faraday House, Warwick Technology Park, Gallows Hill, Warwick, CV346DA

Power Responsive Flexibility Forum

Update on developments in network access and charging

October 2018

Reforming our electricity network access and charging arrangements

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Access Rights & Forward Looking Charges review Targeted Charging Review (TCR)

• By this we mean users’ network access rights and how these rights

are allocated. Network access rights

• The elements of network charges that signal to users how their

actions can either increase or decrease future network costs in different locations. Forward-looking charges Residual charges (“scaling”)

• Residual charges are ‘top up’ charges set to ensure that the network

companies’ efficient costs can be covered, after other charges have been levied.

Our “network access” project Our Targeted Charging Review We are currently undertaking a holistic review of network access and charging arrangements, through two linked projects: ➢ The Network access project aims to ensure our networks are used efficiently and flexibly, so consumers can benefits from new technologies and services while avoiding unnecessary costs on bills in general. ➢ The Targeted Charging Review aims to ensure that residual network costs are recovered in a fair way and do not unduly distort behaviour.

Areas we are proposing to review under the Network Access project

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Network access arrangements Improving access choice and definition for larger users Clarify access rights and choices for small users, including households Improving the allocation of access rights, including enhancing the scope for markets Comprehensive review of distribution use of system charges (DUoS) Review of distribution connection charging boundary Focused improvements to the transmission use of system charges (TNUoS) Forward-looking charging arrangements

Options we are considering in the Targeted Charging Review

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Fixed charges (per user fixed charges) Gross consumption charges (based on all user’s consumption

• incl. from
• nsite

generation) Ex ante capacity (charges related to user’s agreed

• r connected

capacity) Ex post capacity (based on measure of individual peak system usage)

We set out in a working paper last November four bases for charging residual charges: We will consult on refined versions of these options later in the year. This will include thinking on any transitional arrangements.

Balancing Services Use of System (BSUoS) charges

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• Our Targeted Charging Review is reviewing

whether changes are needed to remaining “embedded benefits” for distributed generation

Embedded benefits Future direction

• n BSUoS
• We think there could be value in further

work to help determine the long-term direction of BSUoS as a whole, potentially through an ESO-led taskforce in the first instance

• Interaction with our decision on CMP250,

which we will publish shortly

Key timings and how to engage

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TCR Access/ Forward- looking charges

Target first set of changes to take effect

(April 2022)

Q4 2018

Consultation

• n “minded-to”

SCR decision

(late 2018)

Proposed

review

launch

Q3 2018

Ongoing policy development Consultatio n on scope and form of review

2019 2020 2021

Implementation from 2020/21

• nwards

SCR conclusions decision

(2nd half 2020)

Options development, assessment and consultation

2022

SCR decision and

• utputs raised as

code modifications

You can engage through: ➢ Responding to our written consultations ➢ Attending the Charging Futures Forum or other specific workshops we may hold ➢ Accessing materials such as summary notes, podcasts and webinars at www.chargingfutures.com

DSR Code of Conduct

John Bryant Director of Business Development 23 October 2018

A what??

Why the ADE?

We represent the majority of DSR aggregators in UK Recent experience of establishing a similar scheme for heat customers Alignment with the ADE vision; for A local, efficient, low carbon energy system which enables energy users to make the choices which work for them

Why do we need a Code?

In 2016 an ofgem report estimated that by 2020 DSR may provide up to 30-50% of Balancing Services Concern that aggregators are not licensed or regulated In 2016 Ofgem had no evidence of significant inappropriate behaviour Aggregators want to ensure a high level of customer trust in the market

What problems are we solving?

ENERGY USER

Who can I trust? What should I expect? How do I compare?

• Assurance that ethical business

standards are being adhered to by members

• Requires bids & proposals include

common elements so different suppliers can be compared on a like for like basis

• Ensures transparency about what

members will provide and any

• bligations Customers may be

taking on

The Code addresses five key areas

Sales representatives are properly trained and introducing honest and factual marketing material to customers.

Sales & Marketing

Critical energy assets are safe from the threat of cybercrime, requiring best practice to protect customer’s data and infrastructure. To protect on-site personal, site visits are conducted in a safe and secure manner.

Proposals and pre-contractual information

The pre-contracting process is transparent and does not make false promises to customers and is representative of true savings and payback to customers.

Contracts

Contracts are accurate and clearly indicate any potential obligations customers may be committing to.

Technical Due Diligence & Site Visit

There are clear, transparent processes for recording, processing and responding to complaints.

Complaints Procedures & Audits

Development of the Code?

Commenced in 2016 with input from; – Independent aggregators, – Supplier aggregators, – Third party intermediaries, – Customers, – Customer representatives, – Government (BEIS, ofgem, NG & NCSC), In 2017 the draft Code underwent legal review by legal firm Squire Patton Boggs

Why do we need a compliance scheme?

There has to be a mechanism to confirm that the requirements of the Code are being met It will include; – Contractual commitment to abide – Audit process – Penalties for infringement – Independent oversight by Committee – Mechanism for improvements

Key aspects of the Scheme

The Code is for Business to Business relationships only Does not include a dispute resolution service Customers submit complaints via the website Will indicate if a Member breached the Code or the Scheme Bye-Laws and apply appropriate penalties Audits will ensure ongoing compliance Will include a mechanism to update the Code & Bye-Laws

The ADE

Governance of the Scheme

Scheme Company Scheme Members Board of Directors Eligible Customers

COMPLAINTS GUINDANCE

Scheme Committee Compliance Panel Appeals Panel Scheme Website Scheme Administrator

MEMBERSHIP AGREEMENT

Delivery timeline

End of October – Publish the Code on ADE website End of 2018 – Launch the Compliance Scheme The Code & Scheme Bye-Laws will be “living documents” During 2019 - Target to incorporate in framework agreements and increase membership

What about the domestic market?

Very different code is needed for domestic customers Will need to include dispute resolution What business models will appear? Engaging with RECC

(www.recc.org.uk)

John Bryant Director of Business Development The Association for Decentralised Energy Tel: +44(0)20 3031 8740 Mob: +44(0)7449 720 588 Email: john.bryant@theade.co.uk Web: www.theade.co.uk Twitter: @theADEuk