Energy Networks Association Open Networks Future Worlds - - PowerPoint PPT Presentation

Energy Networks Association Open Networks Future Worlds Stakeholder Event

London 3rd September 2018

Welcome & Introduction

Nigel Turvey

ENA Open Networks Project Chair

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Housekeeping

Amenities

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• Tea, coffee and biscuits can be found next to reception or the members area.

Attendance Sheet Please sign the attendance sheet located in the far corner before departing.

If you require any further information, wish to take part in the consultation or are interested in hearing more about the ENA Open Networks Project, please email us at opennetworks@energynetworks.org.

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Introduction | Open Networks Project

Nigel Turvey ENA Open Networks Project Chair

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Open Networks

• Open Networks (ON) is pan industry initiative that is laying the

foundations of a smart, flexible energy system in the UK.

• Taking a whole system approach, ON looks at the transition to DSO

that will create new markets and enable flexibility.

• ON is a key forum for addressing the challenges around evolving

roles and responsibilities in the short, medium and long term.

• ON is a key initiative to deliver Government policy set out in the

Ofgem and BEIS Smart Systems and Flexibility Plan, the Government’s Industrial Strategy and the Clean Growth Plan

• We are working in collaboration with Ofgem, BEIS, 10 of UK and

Ireland’s electricity network operators and other key stakeholders from the industry

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Collaborating Members

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Objectives & Timeline

The objectives of the Open Networks Project are to: 1. Develop improved T-D processes around connections, planning, shared TSO/DSO services and

• peration

2. Assess the gaps between the experience our customers currently receive and what they would like and identify any further changes to close the gaps within the context of ‘level playing field’ and common T & D approach 3. Develop a more detailed view of the required transition from DNO to DSO including the impacts on existing organisation capability 4. Consider the charging requirements of enduring electricity transmission/distribution systems

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Stakeholder Engagement

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Undertaken 4 consultations & planned another 2

4 webinars and 2 focus groups completed with stakeholders Published our material on ENA website

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Workstream 1 | T-D Process

Sotiris Georgiopoulos

UK Power Networks

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T – D Process (WS1)

WS1 Products 1 Investment Processes 2 DER Services Procurement 3 Industry Framework Interactions 4 Reliability Standards & Emergency Requirements 5 Whole System FES 6 Regional Service Requirements 7 ANM Information 8 System Wide Resource Register 9 TSO-DSO Transmission Impacts 10 Facilitating Connections – Current Practice for Flexible Resources 11 Facilitating Connections – Action Plan and Report 12 TSO/DSO & DER Data Requirements 13 Operational Data & Control Architectures

Focussing on whole system approaches across T and D to put in place improved investment and

• perational planning processes.

Building on Phase 1 work e.g. DER Services. Benefits:

• DER service opportunities
• Input to Whole System Investment
• Better information for stakeholders
• Ongoing network reliability

Workstream 2 | Customer Experience

Jason Brogden

ENA Open Networks Project Director

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Customer Experience

WS2 Products 1 Good Practice ahead of Connection Applications 2 Management of Capacity 3 Explanation of ‘Terms’ & ‘Definitions’ 4 Information on Flexibility Services 5 Good Practice Following Connection Applications 6 Guidance on Post Connection Changes 7 Provision of Constraint Information 8 2017 Product Updates

Improve information for customers to support network connection and service provision Benefits:

• Enhanced information on

connections & services

• More consistent customer

experience

• Better practice across Network

Operators

• Improved use of capacity

Workstream 3 | DSO Transition

Stewart Reid

Scottish & Southern Electricity Networks

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DSO Transition

WS3 Products 1 SGAM Modelling of DSOs and DER Procurement 2 Further SGAM Modelling of DSO Functionality 3 Market Agnostic DSO Elements 4 Independent Impact Assessment of Models 5 DSO Model Validation & Review Including Public Consultation 6 Key Enablers for DSO 7 Further Trials to Address Gaps in DSO Functionality 8 Preferred DSO Models & Proposed Implementation Plan

Develop and model DSO functionality Proposed implementation plan and “no regrets” DSO actions Impact Assessment of different DSO models

• Independently reviewed
• Build evidence base to provide to

policy-makers

Benefits:

• Articulation of DSO value
• Early implementation of key areas
• f DSO functionality to benefit

customers

• More consistent DNO practice

Workstream 4 | Network Charging

Nigel Turvey

ENA Open Networks Project Chair

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Network Charging

• Support Ofgem’s CFF (Charging Futures Forum) and related Task Forces.
• Support Ofgem’s CDB (Charging Delivery Body) in translating the results

from the CFF into manageable actions and ensuring their delivery.

• Provide support on charging to the wider Open Networks project.
• Develop recommendations to remove inefficient signals in charging and

remuneration of TSO/DSO services.

• WS4 have contributed significantly to the delivery of the Electricity

Network Access & Forward Looking Charges: Final Report and Conclusions report delivered under the CFF Task Forces.

• http://www.chargingfutures.com/media/1203/access-and-flc-final-report-

and-conclusions.pdf

Coffee Break

Ofgem Perspective

Edwin Tammas-Williams Ofgem

RPI-X RIIO 1 RIIO-2 and beyond

The energy transition and network company regulation

Our regulatory stances – What will underpin Ofgem’s approach

• Promoting effective competition to deliver for consumers
• Driving value in monopoly activities through competition and

incentive regulation

• Supporting innovation in technologies, systems and business models
• Managing risk for efficient and sustainable energy
• Protecting the interests of consumers in vulnerable situations

The challenge

The energy landscape is changing, but how it is changing is uncertain 2004 2016

The challenge

There are many perspectives on how to achieve this: from evolution to revolution.

What the challenge means for us

• 1. Change is necessary
• 2. The nature and speed of that change is highly uncertain so

reforms must be resilient

• 3. Policy and regulatory changes (radical or otherwise) require

a comprehensive evidence base a) Stakeholder expertise is critical b) Building on sound analysis is needed c) A wide range of perspectives adds value.

ENA Future Worlds consultation

Responses to the consultation and the impact assessment will form part of our evidence base for possible regulatory changes We want the outputs to be as useful as possible, therefore engagement with the process is essential

• Ensure the analysis provided meaningful
• Fully consider impacts on a broad range of stakeholders
• Ensure wider perspectives on roles and delivering functions are taken into account

Ofgem perspective

• The energy system is changing, and the right institutions and interfaces are

needed (with the right regulatory framework) to maximise consumer value

• There are currently hugely divergent perspectives on what the right

arrangements look like

• This consultation is part of the evidence base we will use to inform our

regulatory design, and thus we urge stakeholders to engage

Consultation Overview & How to get Involved

Andy Wainwright

National Grid ESO

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Future Worlds Introduction

‘Future Worlds’ is the output of a substantial stakeholder engagement process to map and describe a number of potential future electricity networks (“Future Worlds”) capable of supporting the smart decentralised energy industry that the UK is transitioning towards. At this stage we do not seek to recommend any particular Future World but instead to understand them, creating a common view of how each works allowing informed debate and decisions to follow.

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Overall aims

• The Future Worlds consultation builds on the

2017 Commercial Principles paper, but considers all the functions of DSO rather than simply market models.

• In brings together many of the key products for

workstream 3 in 2018 such that the overall aims

• f the consultation are;
• Obtain feedback on the ‘future worlds’

developed and their associated SGAM models including whether we have reflected stakeholder interactions appropriately

• Review draft criteria and proposed

structure for the Impact Assessment

• Obtain feedback on both key enablers and

market agnostic DSO elements to inform these products.

Product 5: Future Worlds Consultation

Products 1&2: SGAM modelling Product 3: Market agnostic DSO elements Product 4: Assessment

• f Future

Worlds Product 6: Key enablers for Future Worlds

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Consultation approach

The Future Worlds consultation document

• High level document summarising the worlds from a stakeholder perspective
• Intended audience; Stakeholders who want a high level view of our work
• Feedback via consultation responses

The EATL modelling summary

• Detailed document produced by EA Technology giving further detail of the worlds

developed and their outputs

• Intended audience; Stakeholders who want to understand the future worlds in detail

The Models

• Links to the 5 SGAM Future Worlds to allow industry experts to explore the detail
• Intended audience; Stakeholders who value being able to explore and critique the SGAM

models

• World A

World B World C World D World E

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Consultation areas

• A description of the five Future Worlds

The Future Worlds

• A high level summary of the methodology employed to build the Smart Grid

Architecture Models

The Smart Grid Architecture Model

• An overview of why the principle of neutral market facilitation is important

The principle of neutral market facilitation

• Key stakeholder insights for each of the 23 actors described in the models

Stakeholder insights

• Our intended approach to impact assessment modelling of the worlds inviting

your views

Assessing the Worlds

• A description of the key enablers needed to deliver the future worlds

Key enablers for the Future

• A summary of our proposed next steps including our work on least regrets analysis

Proposed next steps

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How to get involved

We using a variety of means to reach out to stakeholders during the consultation period, which will run between 31st July 2018 and 25th September 2018 inclusive.

Stakeholder Events

Webinar 1 - 21st August 2018 Edinburgh - 29th August 2018 Webinar 2 - 13th September 2018 London - 3rd September 2018 Please visit the ENA Open Networks Future Worlds page for further

• information. You can respond to the consultation via email;
• pennetworks@energynetworks.org

Introduction to SGAM Modelling The 5 Future Worlds Actors in the Future Worlds

Tim Manandhar

UKPN

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Introduction to SGAM Modelling

The Smart Grid Architecture Model (SGAM) methodology is a way to represent a complex electricity system and break it down into is individual parts. It is three dimensional which allows complex aspects of the electrical network to be considered from a variety of perspectives Commercial Principles Paper (2017) Consulted industry on commercial principles to promote flexibility markets and potential market models. Smart Grid Architecture Modelling Further development of industry preferred market models through a series of industry workshops with consideration of additional functions and processes required for DSO. Future Worlds Consultation

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Developing the Worlds

The Future Worlds

Commercial Principles paper DSO Functions Principle of neutral market facilitation Stakeholder feedback

The Future Worlds have been developed from other Open Networks products;

• The market models described in the

2017 Commercial Principles paper

• The DSO functions and activities
• The principle of neutral market

facilitation

We have also used stakeholder feedback from;

• The Commercial Principles paper
• The 2018 Open Networks work

programme

• A series of industry workshops

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Five Future Worlds

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The Future Worlds - Consultation Questions

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Stakeholder Insights

• Following stakeholder feedback a significant part of this consultation is devoted to

describing the impact of each of the future worlds on each identified stakeholder group. We are interested in your thoughts on the material presented and the approach we have taken.

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Stakeholder Insights - Consultation Questions

Principles of Neutral Market Facilitation

Steve Atkins

Scottish & Southern Electricity Networks

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The Principle of Neutral Market Facilitation

• The Future Worlds consider a range of parties who may

facilitate flexibility markets in the future;

– Distribution System Operators (DSOs) – National Grid in its role as Electricity System Operator (ESO) – Third party organisations taking on the role of ‘Flexibility Co-

• rdinators
• We believe that all parties facilitating flexibility markets

will need to adopt the principle of neutral market facilitation

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Principles of Neutral market Facilitation- Consultation Questions

Stakeholder Insights

Helen Stack | Centrica Charles Wood | Energy UK

Energy UK – An Introduction

Energy UK – Stakeholder Insights on Future Worlds

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Energy UK is the trade association for the GB energy industry, with a membership of over 100 suppliers, generators and other stakeholders with a business interest in the production and supply of energy for domestic and business consumers. Our membership covers over 90% of both UK power generation and the energy supply market for UK homes. We also represent the diverse nature of the UK’s energy industry – from established FTSE 100 companies right through to new, growing suppliers, generators and

• thers, which now make up over half of
• ur membership.

Engagement in the Future Worlds Project

Energy UK – Stakeholder Insights on Future Worlds

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Advisory Group

• Two Seats for Energy UK
• Two Seats for Energy UK members

SGAM Workshops

• Energy UK and members attended and fed into the initial

discussions on the models, and pushed for the inclusion of Models D and E. Friends’ Review

• Energy UK fed into discussions on the format of the consultation,

examining how to make a three-tiered consultation accessible.

• Energy UK was given a look at the consultation document shortly

ahead of publication for drafting comments.

Energy UK Position on Future Worlds

Energy UK – Stakeholder Insights on Future Worlds

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The Consultation This is a complex area of the energy system transition and as such is a consultation with a lot of levels of detail to it. These events are important to ensuring that a wide audience is able to input and aren’t put off by the scale of the challenge. Neutral Market Facilitation ESO, TO, DSO and DNO need to continue to hold a role as neutral market facilitators, maintaining a system which prioritises the development of market solutions. To ensure competition continues, regulated monopolies should be able to access markets, but should not play into them. No-Loss Actions Whilst Energy UK sees these models as useful, none of them are exactly matched to

• ur ideal model. There are, however, certain actions that sit across the models and

should be taken forwards. Increased Information gathering and sharing capabilities, particularly on distribution- level networks is a crucial element to move forwards with regardless of the future shape of the energy system.

Energy UK – Additional Thoughts

Energy UK – Stakeholder Insights on Future Worlds

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ESO Coordinates The ESO should retain overall responsibility for System Balancing, with an obligation

• n DNO’s and DSO’s to declare their regional position in the same manner that

Generators are required to for their plant. The ESO should also continue to hold the ability to call upon DNO and TO assets to address a national balancing issue. The surrounding communications capabilities will need to be further developed to ensure that ESO and DSO actions are not in conflict. Elements of World B, World D and World E will be needed in future and this consultation process is important in exploring those worlds in greater detail. DNO / DSO Division There is still uncertainty over the form of a DSO and how to appropriately separate that from the functions of the DNO. Recent changes to increase the independence of the ESO from the TO should be reflected in the process of creating a DSO model. It is important that we keep an

• pen mind in order to find the best solution for consumers.

Thank You

Charles.Wood@Energy-UK.org.uk

08/2018

Q&A

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Lunch

The Smart Grid Architecture Model & Demo (SGAM)

Manuel Castro & Mark Sprawson

EA Technology

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Why we used SGAM methodology

The purpose of the SGAM modelling is twofold: firstly, to compare and contrast the five future worlds, and secondly to act as a base model for DNOs to build their required architectures, interfaces and business processes around for the DSO

• transition. To enable detailed comparison
• f the future worlds, the interactions

between actors are captured and categorised as part of the SGAM work.

Not all the layers have been populated at this point. There are more inputs required from trials and as the modelling becomes more detailed, it is more appropriate that each network

• rganisation models their particular system specifically to account for regional differences.

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How the SGAM Model was built

The model was built using a top down approach through a series of industry workshops, starting with the main functions of a DSO as a neutral market facilitator DSO Functions

System Coordination Network Operation Investment Planning Connections & Connections Rights System Defence and Restoration Service Optimisation Charging Service/Market Facilitation

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How the SGAM Models are presented

• Full models available
• nline as interactive

webpages

• Can navigate by

function or by actor

• Understand data flows

and interactions between different actors in different worlds

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Demonstration of Models

The Models

• Links to the 5 SGAM Future Worlds to allow industry experts to explore the detail
• Intended audience; Stakeholders who value being able to explore and critique the

SGAM models

• World A

World B World C World D World E

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The Smart Grid Architecture Model- Consultation Questions

Least Regrets Elements

Steve Atkins

Scottish & Southern Electricity Networks

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Least Regrets Analysis

• Assessment of the five

future worlds has identified areas of common functionality between the worlds

• These areas could present
• pportunities to implement

aspects of smart grid now

• We are interested in your

thoughts on this work to inform our next steps

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Areas of no regrets by function

Areas of no regrets tend to be aligned with achieving whole-system objectives through long-term planning establishing regulatory frameworks

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Areas of no regrets by function

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Function Key areas of no regrets

System Coordination

• Coordinated outage planning
• Regulatory framework for flexibility service provision
• Flexibility compliance to activation/dispatch signals

Network Operation

• Development of network stability mechanism
• Outage requests
• Real-time network monitoring for thermal and voltage excursions
• Activation of flexibilities and smart grid solutions

Investment Planning

• Traditional investment planning
• Quality of supply planning standards

Connections and Connection Rights

• Regulatory development of standard connection agreements for

flexibility

• Recovery of unused connection capacity

System Defence and Restoration

• Black Start
• Islanding
• Voltage reduction

Services and Market Facilitation

• Assess requirements for flexibility services
• Procure and activate flexibility
• Conflict mitigation and resolution

Service Optimisation

• Regulatory framework for market failure and last resort measures
• Arrangements for activation of last resort measures
• Development of smart grid solutions

Charging

• Exchange of information to determine market charges
• Access charges for flexibility resources

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Least Regrets Analysis- Consultation Questions

Q&A

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Coffee Break

Assessing the Worlds

Ross Thompson

UK Power Networks

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Assessing the worlds

Purpose The purpose of the Impact Assessment is to provide an independent relative analysis of these Worlds to help understand the relative costs and benefits between the different Worlds to provide an evidence base for future market structures and corresponding policy/ regulatory thinking. Approach Employing independent, external resources to assist with assessing each world against the agreed criteria. Where possible assessment will be quantified using robust data and where qualitative assessment is appropriate, evidence for conclusions will be documented. Engagement

• f all stakeholders will be an integral part of this process to ensure the

analysis is informed by the broadest set of evidence possible.

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Assessing the worlds – draft assessment criteria

• 1. Strategic case - How well does each model address the “case for

change”?

Enhanced Customer experience Choice, Fairness, Affordability, Confidence and Trust Greater environmental sustainability Facilitating greater energy efficiency, decarbonisation of electricity generation and heat/transport and more electricity consumed closer to point of generation i.e. lower losses

• 2. Economic case - How efficiently does each model address the

“case for change”?

Financial benefits Cost of implementation vs benefits, Cost of operation vs benefits and Expected benefits Whole system optimisation Supports whole system optimisation, Optimises locally, Brings more flexibility into the system, Manages conflicts, Avoids duplication and Exploits synergies

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Assessing the worlds – draft assessment criteria

• 3. Commercial case - How deliverable is each model – are the markets

viable and regulation appropriate?

Market viability and Appropriate regulation

• 4. Financial case - How viable are the funding arrangements for each

model?

Regulatory funding and Market facilitation

• 5. Management case - How viable/achievable is each model in terms
• f complexity and alignment of responsibilities/actions with roles?

Industry structure and organisation Rules and regulation, Facilitates neutral, Complexity, Implementation and Future proof Technical performance Safety risk, Service reliability and availability, Security, Resilience and recoverability and Clear dischargeable accountability for technical performance

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Impact Assessment; proposed timeline

• The Impact Assessment

will be undertaken by independent consultants

• Mindful of timescales

we are already progressing the consultant selection

• We have developed a

timeline which will allow for responses to the Future Worlds consultation to be incorporated into the assessment approach

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Assessing the Worlds - Consultation Questions

Key Enablers for the Future

Alan Collinson

SP Energy Networks

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Key Enablers for the Future

• We have identified a number
• f key enablers required to

be developed to facilitate the Future Worlds. These enablers are required regardless of the world developed.

• We are interested in your

views on this list and short term priorities for ensuring enablers are in place.

• Regulatory changes
• Organisational changes

Changes to industry structure:

• Market engagement
• Contract requirements
• Funding

Developing a market-based approach:

• Communications infrastructure
• IT systems
• Network visibility and control

Facilitating information and data exchange

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Changes to Industry Structure

• Regulatory changes (guiding principles)

– Promotion of effective markets & competition

• Customer choice, customer control
• Cost-reflective, realising value, level playing field

– Smart Grids & Flexibility

• Smart technologies, technical & commercial innovation

– Secure, affordable, sustainable energy system

• Organisational changes

– Closer internal interactions – Closer DSO-ESO interactions – Closer interactions with customers

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Developing a Market-based Approach

• Market Engagement

– Raise awareness – Increase participation – Increase market liquidity – Increase competition

• Contract Requirements

– Technical requirements & specifications – Open access for all potential providers – Payment mechanisms – Quantification of service delivery – Settlement arrangements

• Funding

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Facilitating Information and Data Exchange

• Communications & IT Systems

– More data, faster, reliable, quality – Internal, External, Public – Integrated solution (IT & OT) – Cyber security – Data analytics, forecasting

• Network Visibility & Control

– Monitoring of the secondary (LV) network – Smart meter data – Network automation, remote control

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Key Enablers- Consultation Questions

Proposed Next Steps

Andy Wainwright

National Grid ESO

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Next Steps

• DSO definition &

functions

• DSO functions
• Commercial Principles

paper

2017 work programme

• SGAM modelling
• Key Enablers
• Future Worlds

consultation

Development phase

• Refining SGAM & key

enablers

• Impact assessment
• Least regrets analysis

Review phase

• Evidence pack for BEIS

and Ofgem

• Impact assessment

consultation

Final conclusions

Q&A

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Final Comments and Conclusions

Nigel Turvey

ENA Open Networks Project Chair

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• The opportunities and implications of these Future Worlds are significant

societally, commercially and technically, and we recognise it is important that to get responses from a wide variety of interested parties, to inform the further development of these Future Worlds.

• We welcome all feedback on our work. In the main consultation document we

ask a number of questions and would value your thoughts. Responses to the consultation can be emailed to opennetworks@energynetworks.org. All responses must be submitted to ENA by 18:00 on 25th September 2018.

We welcome feedback from all our stakeholders. If you have any comments that you would like to share, please feel free to submit them to opennetworks@energynetworks.org.

Wrap Up

Feedback

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Additional Slides

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