[PPT] - Energy Networks Association TSO-DSO Project Advisory Group 27 th PowerPoint Presentation

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Energy Networks Association

TSO-DSO Project – Advisory Group 27th April 2017

The Voice of the Networks

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Welcome & Introductions

Nigel Turvey – ENA TSO DSO Project Steering Group and Advisory Group Chair

2

SLIDE 3

Introduction Address

David Smith – ENA Chief Executive

3

SLIDE 4

TSO-DSO Project – Goals & Communications Plan

Jason Brogden – TSO DSO Project Director

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The Voice of the Networks

In December Energy Networks Futures Group & ENA Board (Business Leaders) gave their

commitment to a long-term project to be led by ENA to progress the transition of DNOs to DSOs, provide clarity to the interface between DSOs & TSOs and improve the customer experience.

First Phase to deliver in 2017
Expect Second Phase in 2018 and then beyond to ED2/T2

TSO-DSO Project Introduction

Definition of T-D Processes, Customer Experience, DNO to DSO Transition & Charging Impact Assessment of Options and Preferred Design Regulatory Enactment Design, Build and Test

Phase 1 Phase 2 Phase 3 Phase 4

End 2017

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The Voice of the Networks

The objectives of the TSO-DSO Project for the first phase of work in 2017 are to: 1. Develop improved T-D processes around connections, planning, shared TSO/DSO services and operation 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

TSO-DSO Project Objectives

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The Voice of the Networks

ENA Board ENFG New TSO-DSO Project Steering

Workstream 1: T-D Process Workstream 2: Customer Experience Workstream 3: DNO to DSO Transition Workstream 4: Charging

Governance and Hierarchy

TSO-DSO Project Advisory Group ERG

inform inform advise

COG

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The Voice of the Networks

HV

Active

Network

Management Group

Charging Task Group Shared Services Working Group Statement of Works

TDI WG to TSO DSO Project

1. T-D Process
2. Customer

Experience

3. DNO to DSO

Transition

4. Charging

TSO-DSO Project

ENA Transmission and Distribution Interface Steering Group

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The Voice of the Networks

1. T-D

Process 2. Customer Experience

3. DSO

Transition

4. Charging

Project Workstreams

Workstreams

Stakeholder Engagement / Transparency / Programme Management Regulatory and Policy Considerations – inc. EU packages Commercial Considerations Smart Grid Forum WS6 Actions and Outcomes

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The Voice of the Networks

SME1
SME2
SME3

1

SME1
SME2
SME3

2

SME1
SME2
SME3

3

SME1
SME2

4

SME1
SME2

5

SME1
SME2
SME3

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Proposed Development and Workstream (WS) structure

Products

Lead / Chair: Sotiris Georgiopoulos (UKPN) + Member Representatives

WS1 – TD Process

The Work Stream Group will steer the development of the products
The Work Stream Member Chairs should sit on the steering group
Member representatives can also be SME’s for particular products
SME1
SME2
SME3

1

SME1
SME2
SME3

2

SME1
SME2
SME3

3

SME1
SME2

4

SME1
SME2

5

SME1
SME2
SME3

6

SME1
SME2

7

Products

Lead / Chair: Mark Drye (NpG) + Member Representatives

WS2 – Customer Experience

SME1
SME2
SME3

1

SME1
SME2
SME3

2

SME1
SME2
SME3

3

SME1
SME2

4

SME1
SME2

5

Products

Lead / Chair: Stewart Reid (SSE) + Member Representatives

WS3 – DNO to DSO Transition

SME1
SME2
SME3

1

SME1
SME2
SME3

2

SME1
SME2
SME3

3

SME1
SME2

…

SME1
SME2

x

Lead / Chair: Paul McGimpsey (SPEN) + Member Representatives

Products WS4 - Charging

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The Voice of the Networks

Investment Planning processes (processes that result in either capital or opex investment

decisions for network businesses)

Operational Planning processes (capturing operational planning, real time, balancing and

settlement)

Develop whole system investment and operational Planning Processes/models
Review development of ancillary services across GB
Develop approach for the co-ordination of transmission and distribution constraints in an
perational timeframe
Develop whole system commercial agreements for Active Network Management with

distributed generators

Review and update SoW to take into account TSO DSO project scope and developments

Workstream 1: T-D Process Scope

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The Voice of the Networks

Customer Journey Maps for Connections & Service Provision
Short Term Improvements –make early improvements to processes for connection and

service provision.

Updated Connection Arrangements - Agree and implement changes to network access

arrangements (Bilateral Connection Agreements) for DER. Explain the different connection

ffers available to customers and the impact that these can have on them
Service Provision Improvements
Customer Journey Maps for Changes to Legacy Arrangements
Emergency Events Customer Journey Maps
Customer Information Requirements –improvements to the information that is provided to

support network access and service provision.

Ensure that agreed improvements to customer experience are taken forward in other

workstreams.

Complete ongoing work to improve Statement of Works process.

Workstream 2: Customer Experience Scope

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The Voice of the Networks

1. DSO Transition Roadmap - a roadmap to deliver transition to DSO in the short, medium and long term 2. DSO Functional Requirements 3. Model for DSO - model for DSO with some options set out for governance models which will allocate DSO functions to system roles and responsibilities 4. DSO Market Model Options Comparison & Evaluation - an assessment of the risks/benefits for power system users, customers and industry participants 5. Trials to Support DSO Definition – if necessary definition and initiation of trials to test different market models and/or any gaps in the existing evidence base to support decisions to define market models (across different regions and Network Operators)

Workstream 3: DNO to DSO Transition Scope

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The Voice of the Networks

Short-term – by June 2017 1. Identify problems caused for customers through the interaction of current charging arrangements across Transmission and Distribution on customers 2. Capture the root causes of these problems. 3. Establish the level of commonality that might be required to resolve identified root causes and deliver project and workstream objectives/goals. 4. Develop recommendations including - overview of current industry charging reviews, proposals to solve issues identified, implications to existing arrangements and steps needed to implement, recommendations for a charging framework (focused on connection and Use

f System charging), identification of quick wins.

Medium-term – by December 2017 5. Recommendations to Ofgem : Smart tariffs, flexible connection services, ancillary services pricing; identify requirement for (cross sector/industry) working groups to progress long- term deliverables. Long-term Products potentially 2018-2020 6. Strategic Review – Whole System Pricing 7. Consider proposals to change the governance around changes to the methodologies

Workstream 4: Charging Scope

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The Voice of the Networks

Regular collaborative meetings with BEIS, Ofgem and the Advisory Group Promotion of our project to stakeholders and influencers by demonstrating:

tangible benefits to consumers, businesses and the UK economy
how the project delivers the vision of a wider ‘Smart Grid’ and a smarter,

flexible energy system

a transparent approach that encourages industry engagement

We have a list of interested parties to keep informed We have a TSO DSO Project page on the ENA website and we will continue to publish output: http://www.energynetworks.org/electricity/futures/tso-dso- project/overview/

Communications Plan & Engagement

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Address from the ENA Chair

Basil Scarsella – CEO UKPN

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Advisory Group Terms of Reference

Nigel Turvey – Advisory Group Chair

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The Voice of the Networks

The Advisory Group is essential to our project to:

Ensure stakeholders are aware and taking the Project into account in their

work

Request input from stakeholders to improve the quality of our products
Increase awareness about project risks & issues, ask for views on risks &

issues and collaboratively resolve where appropriate It will provide input to:

Steering Group on project scope, progress, risks & issues
Workstreams with deliverable comments/feedback

We will seek to send information in advance of meetings to ensure that views can be sought by trade associations in advance

Easter timings with early workstream meetings meant that we couldn’t get

information out as early as we wished this time

Purpose

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The Voice of the Networks

The Advisory Group includes representatives from (in no particular order): We have sought to use trade associations where possible to disseminate information to a wide group of organisations and to give the opportunity to trade associations to gather input from a range of members. We will meet every 2 months, if we need input to our deliverables between then, we will request input (either by correspondence or teleconference)

This may be with a subset of Advisory Group members

WE WANT THESE MEETINGS TO BE OPEN & COLLABORATIVE

Membership & Meetings

Suppliers, Generators (including renewables, distributed generators) Storage Operators Aggregators Associated industry initiatives (e.g. FPSA) Ofgem Governments Academia Customer Representatives iDNOs Gas Network Operators Equipment Manufacturers Market Operator

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Key Deliverables this Year

Jason Brogden – ENA TSO DSO Project Director

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The Voice of the Networks

Key Deliverables

Deliverable Planned Date WS1 - Investment and Operational Planning Change Requirements Sep 2017 WS1 – Whole System Planning Processes/Models Dec 2017 WS1 – Ancillary Services Review Dec 2017 WS1 - Approach for the co-ordination of T & D constraints Dec 2017 WS1 - Whole system commercial agreements for ANM with DG Dec 2017 WS1 – Statement of Works Mods & Industry Guidelines Aug 2017 WS2 – Customer Issues Analysis June 2017 WS2 – Service Provision Improvements Dec 2017 WS3 – DSO Definition & Tier 1 Roadmap May 2017 WS3 – DSO Transition SGAM Model Oct 2017 WS4 - Charging Recommendation Paper June 2017

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LUNCH…

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SLIDE 23

Preview of First Project Deliverables

Workstream Leads

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Customer Categories

Mark Drye – Workstream Lead

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The Voice of the Networks

Our first draft of work to date to categorise network connected customers (T & D)

– we need your priorities and input to this

Purpose of this work is:

– To assess the experience of different types of customers through their customer journeys and identify issues for different types of customer – To understand potential contract options for the categories of customers that wish to engage in providing flexibility services – As input to other workstreams to test the outcomes of processes (TD), models (DSO Transition) and mechanisms (charging) to see that improvements/changes work for different types of customer

Connected customers will evolve and may move between categories through the

lifetime of connection and this is being considered in customer journey mapping

Categorisation is not used to identify journeys; it is used to consider how the

journeys work for different categories of customer

What we want out of this session is feedback on

– the categorisation and confidence you can see yourselves in the categories – Have we got the right level? Does it need to be more specific?

Customer Experience Workstream

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The Voice of the Networks

Definition of Customer Categories As presented to Advisory Group 27/4/17

Category Characteristics Customer Type Examples Contract Examples

A

System Service Providers

Their core function (or a key element of their overall business portfolio) is to manage load, generation or storage to sell ancillary services to TSOs and DSOs.

TSO contracted service provider, e.g.
Balancing Mechanism Units (BMUs)
Enhanced Frequency Response services
Ancillary Services
DSO service contracted flexibility service provider
Bilateral agreements

with the DSO / TSO

B

Active Prosumer

Have invested in generation, storage, demand side management and / or low carbon products. They will actively participate in the energy market to make money from generation, reduce operating costs and/or for low carbon social responsibility reasons. They do not have contracts for services to TSOs or DSOs. Could have automated controls to maximise savings / returns.

D connected generation, e.g. solar farm exporting
Behind the meter generation/storage, e.g. for

peak lopping, triad avoidance

Demand side response e.g. for peak lopping, triad

avoidance

Residential customers actively engaged e.g. timing
f EV charging, use of heat pumps/solar/storage
Power Purchase

Agreements

Suppliers via ToU tariffs
r products
Contracts with

Aggregators – residential and industrial and commercial

C

Passive Prosumer

Energy conscious low carbon investor generally off-setting demand for benefits (passive/fit and forget). Have invested in ‘off the shelf’ low carbon products such as solar panels, heat pumps, EV or smart appliances to reduce energy bills. May be exporting and importing and would be interested in reducing costs via ToU tariffs.

Businesses or residential with installed products,

e.g. solar panels, heat pumps, EV or smart appliances

Residential customers with customised ToU tariffs
Suppliers via ToU tariffs
r products

D

Passive Consumer

Normally demand customers. Little or no knowledge or interest in ToU

tariffs. Normally on standard single rate

tariff but could include customers on standard 2 rate tariffs and storage heaters.

Business or Residential customers
Basic Supplier tariff

contract

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Transition to DSO Workstream 3: Product 1

Stewart Reid – Workstream Lead

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The Voice of the Networks

Product 1 Scope

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Develop a more detailed view of the required transition from DNO to DSO including the impacts on existing organisation capability, specifically:

DSO Definition

defining the role and responsibilities of the DSO

DSO Roadmap

roadmap to transition to DSO in the short, medium and long term

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The Voice of the Networks

Source: Ofgem / BEIS “A smart, flexible energy system”

A transformation of technology and capability

Replacement of centralised large synchronous generation with a large number

f intermittent non-synchronous distribution

generators Low voltage monitoring & visibility,

inc. smart meters

Network control & automation Commercial arrangements & charging signals Increased SO/TO co-

rdination

New social/local/ commercial energy models New flexible technologies, providers and solutions emerging Rapid/unpredictable pace of change Changing demand/more variable net demand profile

Drivers for system change

Changing use of distribution network by connectee has impacts

n distribution network

Changing use of distribution network by connectee wider system impacts Use of distributed resources & novel techniques for local network management impacts on wider systems Increasing need for distribution- connected resources to support system operation

Impacts

All parties have appropriate visibility of existing and future network Facilitate timely and cost-efficient connections & appropriate signals on where to connect to maximise system efficiency Efficient, whole system planning including: a)Use of build/non build solutions b) Use of optionality across transmission & distribution Efficient use of system resources (including flexible resources and innovative solutions) for local network and system-wide operations* Level playing field for new and existing flexible technologies, providers and solutions & access to wide range of revenue streams Resilient and secure system with efficient emergency and system recovery procedures Responsiveness to readiness for rapid/unpredictable change Market participants have trust and confidence in roles and governance of network companies

Emerging system requirements

Implications for networks

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The Voice of the Networks

Business Change & Integration New skills:

Commercial
Cyber Security
Data Analytics

Customer & Market Intelligence

ICT Data Exchange & Analytics Network Visibility

Key enablers As presented to Advisory Group 27/4/17

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DSO Development – Roadmap to 2030 (Tier 1)

As presented to Advisory Group 27/4/17

ED2 - Long (+8 years) Targeted ANM rollout TSO – DSO Interface Prototypes DSO flexibility products

Commencement of

Regional Planning

Trialing Forecasting
ptions
Targeted System

monitoring

Revised standards

Identifying regulatory frameworks & policy hanges Targeted regulatory frameworks & policy changes Integration of ANM in DSO commercial Services Market arrangements for constraint management Commercial platform developed and scaled for TSO-DSO interface Scaling up TDI functionality Regional Planning DSO ICT - Targeted Implementation LCT Visibility, Tracking & Optioneering Some licence areas operating as regional DSO DSO Commercial Operations becoming core business capability Active System Management Provision of flexible services to TSO and

ther DSOs

Extensive use of Data Analytics

Customer and Commercial Development Technical Development

31 Flexible connections Smart Meter Benefits / DSO Tariffs & Products Billing & Settlement Trialling DSO ICT – Trialling Cost recovery for investment ahead of need Regulation and Non-regulation commercial opportunities

ICT

ENA Standards Current ED1 - Medium (3 -7 years) ED1 - Short (1 -2 years) Flexibility tenders planned TSO – DSO Trials Commenced Targeted Flexible connections Targeted ANM rollout Collaboration with National Grid on Regional Planning DSO Data Exchange & Visibility ICT systems for ANM Improving Demand Forecasting 2017 2018 2019 2020 2021 2022 2023 2024 2030

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The Voice of the Networks

SGAM - Smart Grid Architectural Model

As presented to Advisory Group 27/4/17

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In 2011 the European Commission issued a Mandate to standards
rganisations relating to Smart Grid deployment - M/490
In response, the Smart Grid Coordination Group created an architectural

framework designed for developing & enhancing standards - SGAM

SGAM reflects established ICT principles

for designing complex systems in a technology neutral manner

 this holistic representation of a

system’s components and architecture also has value when designing and communicating solutions

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The Voice of the Networks

Source: Future Electric (Oct 2015) “Distribution systems in a high distributed energy resources future”

Emergent need for enhanced capabilities

As presented to Advisory Group 27/4/17

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Coordination with TSO Data Exchange & Analytics

Time DER Take Up DER Low Adoption DER Med - High Adoption DER Very High Adoption

Active System Management Flexible Connections for Constraint Management Whole System Efficiencies Optimised Investment Planning (Smart & Traditional Solutions) Relationship build with service providers (aggregators, customers) Readiness to tender for Flexible Services Flexible Connections & Dispatch Capability integrated into Commercial Services Tenders for Flexible Services Market Intelligence Minimum Requirement ICT No regret investment – ICT, Systems Monitoring, Settlement Systems Regional & National Flexible Service markets No regret investment – ICT & System Monitoring (Cluster) Regional Forecasting Optioneering between Smart Solutions and Reinforcement Whole System Balancing & Trading Data driven relationship management with customer and market Standardised Investment Planning Approach that includes Flexibility Services Short Term forecasting requirements set Defined R&R and Drivers for local DSO management Enhanced Network Visibility & Risk-based Decision Making Whole System Solutions

Pace of transition will be driven by customer need and DER uptake

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The Voice of the Networks

Support from the regulator and policy makers

As presented to Advisory Group 27/4/17

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Regulatory Framework

Categorisation of DER

so implementation not hampered by position in queue

Security of supply
Develop aligned

incentives to promote whole system solutions

Framework for DNOs

to build storage (or

ther technology)
Ownership of storage

Cost

Expanded DSO/TSO

costs

Harmonisation of

TUoS / DNUoS

Harmonisation of

connection charges

Consistent investment

planning triggers

Understanding the

costs of developing and deploying new DSO capabilities Innovation

Standardised ICT

requirements

Visibility of capacity

and constraints

Integrated T/D Data

exchange

Embedding blockchain
DSO Commercial

Frameworks & Market Platforms

Smart EV Charging
Standards
Visibility & Control
Cross Vector Gas and

Heat synergies

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Charging Workstream Deliverables

Paul McGimpsey – Workstream Lead

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The Voice of the Networks

“To consider the charging requirements of an enduring electricity transmission/distribution system, whose purpose is to facilitate a market place between producers and consumers. Consequently, understanding the drivers of cost and benefits in delivering those requirements. The

verall aim is to develop the appropriate whole-system price signals for the TSO-DSO transition.”

Short-term – by June 2017 1. Identify problems caused for customers through the interaction of current charging arrangements across Transmission and Distribution 2. Capture the root causes of these problems 3. Establish the level of commonality that might be required to resolve identified root causes and deliver project and workstream objectives/goals 4. Develop options to resolve The above development work is being undertaken whilst reviewing how TSO DSO charging work fits with other industry charging initiatives and in discussion with Ofgem on coordination.

Charging Workstream

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The Voice of the Networks

To initiate this work, we have captured:

Existing principles and approaches to charging
Highlighted potential options for commonality, without prejudging what any

resolution options might be. Once we have concluded our initial analysis, we will review output and consider medium term work in light of other initiatives and our results.

We are seeking feedback from this session on:

– Have we captured the relevant principles & approach reference material? – Are there further options we should consider? – Your input on options and issues.

Charging Workstream

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The Voice of the Networks

Analysis of Commonality of Approach and Principles CEER Guidelines

“There is a need for a coherent approach across all voltages.”
7 key principles for distribution network tariffs presented

Licence Obligations – Use of System

No material differences in ‘relevant objectives’ for T&D charges

Licence Obligations – Connection

No material differences in ‘relevant objectives’ for T&D charges

Connection Charging Methodologies

Significant differences in methodologies between T&D charges.
Locational signal greater in D
D charges recovered upfront vs focus on annualised recovery at T

Use of System Charging Methodologies

Two distinct D methodologies – EDCM and CDCM
EDCM and T methodologies have similar features in identifying long run

investment/marginal cost components

CDCM produces average tariffs across all users with no locational

component – focus rather on voltage of connection

Significant differences in recovery of residual revenues

Product Update

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The Voice of the Networks

Options for Increasing Commonality of Approach in T&D Charging Option 1 Align T connection boundary with D – deeper T boundary

Unlikely to have major impact on removing distortions?
Significant implementation issues

Option 2 Align D connection boundary with T – shallower D boundary

Unlikely to have major impact on removing distortions?
Significant implementation issues

Option 3 Agree common cost drivers / scenarios for cost modelling

Harmonisation of diverse cost drivers essential for development of whole

system approach? Option 4 Harmonise modelling approaches

Questionable benefits

Option 5 Harmonisation of residual charges / scaling approaches

Focus of Targeted Charging Review

Product Update

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Breakout Sessions to Discuss Product Review

3 groups – 1 per Workstream Moderated by Workstream Leads

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Role of Advisory Group Open feedback from Group

Moderated by Nigel Turvey

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AOB/Close

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