Energy Networks Association Open Networks Project Advisory Group - - PowerPoint PPT Presentation

Energy Networks Association Open Networks Project Advisory Group

2nd May 2019

Amenities

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Attendance

• Please remember to mark your attendance on our attendance list.

Feedback

• We will provide feedback forms to capture comments from the session.

Correspondence

• If you would like to receive information about the Open Networks Project or have any feedback you would like to submit, please get in touch with us at
• pennetworks@energynetworks.org.

2

General Housekeeping

The Advisory Group is essential to our project to:

• Ensure stakeholders are aware and taking the Project into account;
• 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. We 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. Our objective is to encourage open feedback from you all across all of our work. Thank you for the continued input.

3

Advisory Group ToR Reminder

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Running Order of the Day

Item Leader Welcome & Introduction JB Workstream 5: Launch of Events Calendar EG / DC Workstream 4 Update: Key milestones scoped for this year JB 2018 WS2 P5 Interactivity & Queue Management – key messages and next steps JB The Future of P2: Security of Supply VH Breakout session: WS1A P2A – Procurement Services & P4B – Commercial Arrangements Workstream Representatives Breakout session: WS2 P1A – System Wide Resource Register Workstream Representatives Wrap Up JB

5

Publications and Progress to Date

Work has now commenced on all Workstream products outlined in our 2019 plan. We have taken your feedback to help us identify priorities and shape the scope and direction of travel for this year.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Overall Project Future Workplan & Prioritisation Workstream 3 Product 1 Impact Assessment Workstream 1A Various products Workstream 2 Product 2 Queue Management Workstream 4 Dependent on scoping work

Brief update on the number of responses that have been received

6

Impact Assessment Consultation Responses

Based on stakeholder feedback received through our 2019 Workplan Consultation, we have published a revised version of the PID and a summary

• f our response to the consultation.

The revised PID, stakeholder responses, and the Open Networks Project response can be accessed here.

7

Revised PID & Consultation Responses

Energy Networks Association Workstream 5: Events Calendar & Stakeholder Engagement

Edward Gill / Daniel Clelland (ENA)

9

WS5 Events Calendar

The new calendar can be accessed on the Open Networks Project events page, here

WS5 Stakeholder Engagement

Impact Assessment Consultation  Successfully held face to face events in London and Glasgow, and 2 webinars on the Impact Assessment Consultation  We have been advertising the consultation on social media (LinkedIn / Twitter) and in trade press (Current and Utility Week)  By-lined articles in Current (online), Utility Week (print & online), and a blog piece in Centrica’s newsletter Wider Engagement  We are looking at the option to participate in the Community Energy Conference in June  Parliamentary engagement  Newsletter is being drafted for mail out w/c May 6  Offer to attend stakeholder events/committees  We continue to focus on new ways to engage with stakeholders – suggestions gratefully received

Energy Networks Association Workstream 4: Key Milestones Scoped for this Year

Jason Brogden (ENA)

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Overview

• Previously presented to Advisory Group on proposed areas of work that can

deliver whole energy system benefits.

• Open Networks Steering Group and Gas Futures Group agreed to progress

development work.

• Development work on Investment Planning and Real-Time/Day Ahead

Operation will be prioritised.

• Prioritisation on key areas reduces risk highlighted by stakeholders that a

wide scope of Workstream 4 could compromise delivery of other higher priority workstreams and products

13

WS4 Proposal - Revised

• P3. Season / year ahead forecasting
• P1. Customer connection process
• P4. Investment planning
• P2. Real-Time/Day Ahead Operations

Data Processes & Principles Customer Segmentation Early Development Further Process Development Finalise & Approve Outcomes

14

WS4 Timeline - Draft

15

WS4 Product 2 – Real time / day ahead

Problem statement(s) / hypotheses Review operational processes at real time and day ahead to (i) improve data provision for customers, (ii) explore opportunities for sharing existing best practice between networks, and (iii) identifying opportunities for more data sharing across networks. Focus on next 3-5 years to prioritise quick wins and futureproof where possible. Activity Sub-deliverable A: Identify activities that impact / support cross-vector operation and

• ptimisation e.g.

Site nominations (sites inform control centres as to planned hours of

• peration)

Major outages (look at circumstances where we should share information) System Operation forecasts (data transactions) Test value i.e. potential benefits vs additional workload Review existing terminology and aim to create common dictionary to terms

• f agree common language

Sub-deliverable B: Target processes for implementation across network operator, which are likely to result in consequential business change (this is likely to be different across different network operators depending on what processes they have in place now) Suggested / identified Code Changes, System Changes, Process Changes Recommendations for further work Identification of barriers [regulatory etc.] Output Sub-deliverable A: Report findings and options/ recommendations for improvement Case study for appropriate customer type(s) (Date: September 2019) Sub-deliverable B: Implementation plan (Date: November 2019) Product participants Elec (T): Gas (T): Elec (D): Gas (D): Non-networks: Ofgem Interactions Close linkages with other products in workstream 4 Link to the Energy Data Taskforce group Legal restrictions around data sharing and transparency WS1B – real time data exchange

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WS4 Product 4 – Investment planning

Problem statement(s) / hypotheses Incremental whole system capacity can be realised by identifying a range of credible whole system investment options (>3 years ahead) and optimising the use of existing capacity across gas and electricity networks. Implementing process improvements and information provision can lead to this additional capacity which will in turn support regional authority ambitions and improve customer service. Activity Sub-deliverable A: 1. Process mapping to identify drivers, triggers, timescales and data inputs across network investment analysis. Identify common elements for long term investment planning when initiated by regional authority requirements/strategies. 2. Identify process improvements to the regional authority long term planning interface with energy network investment

• planning. Improve quality, efficiency and customer experience through coordination and common inputs and processes.

3. Case study with a local authority to understand the value from process improvements, whole energy solutions, and information provision. Map process for high-capacity connections/customers and identify opportunities for improved information transparency. Sub-deliverable B: 1. Scope changes required 2. Identify parties involved in implementing changes 3. Work with parties to create timeline and implementation plan Output Sub-deliverable A: Report on initial findings (September 2019) Sub-deliverable B: Implementation plan (November 2019) Product participants Elec (T): Gas (T): Elec (D): Gas (D): Non-networks: Ofgem, local authorities, transport sector, Energy UK), Scottish Government Interactions Close linkages with other products in workstream 4 WS1B – Investment Planning outputs; revised NOA processes

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Contributions to Workstream 4 Development from Stakeholders

• Would anyone like to be directly involved in the development of products in

WS4?

• There is the opportunity for stakeholders to join the product teams and

contribute to development work.

• We are not looking for observers - people will need to dedicate time to Open

Networks development to directly contribute.

• Please identify yourselves to us today; by email; or in the feedback forms

Energy Networks Association 2018 WS2 P5 Interactivity & Queue Management

Jason Brogden (ENA)

Workstream 2 Product 5 on Interactivity and Queue Management published a consultation in November 2018. This document highlights the

• utcomes from the consultation and the further work required in relation to

Queue Management, which is being taken forward by WS2 P2 for 2019. Following the consultation, we have now published all stakeholders responses and the Open Networks response on the Open Networks website, available here.

Introduction

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Broadly the majority of respondents were supportive of the Open networks project working to develop queue management policy. There was strong support across generation stakeholders for the use of ENA milestones that were developed by the DER Connections Steering group, and that if any changes were to be made to these milestones they should be well justified. A number of responses urged the ENA to consider that a ‘one size fits all’ approach to queue management may not be appropriate. However network companies recognise the need for consistency in order for the queue management rules to work.

Queue Management Summary

Queue Management 2019 – Programme

Key outputs February March April May June July August September October November December Updated Roadmaps and Scenarios from WS1 P11 Review feedback from 2018 consultation Report on treatment of Storage/ Flexibility in connection queues for Ofgem/BEIS Agreed principles of queue management (T&D) Agreed Milestones (T&D) Agreed approach to milestone flexibility (T&D) T- D Queue management report for Ofgem/ BEIS Queue management consultation Review responses Updated queue management position Review of industry codes and identify any changes/ blockers Develop implementation plan

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Interactivity options

A large number of respondents requested a consistent, industry-wide approach to interactivity, with increased transparency. The options below represent the available choices for an industry approach to interactivity mentioned in the consultation responses:

• 1. Do nothing – all companies continue as they are
• 2. All to adopt a moratorium period – a “good news first” approach
• 3. All to adopt a UKPN approach – a “good news first” approach
• 4. Remove interactivity altogether – a “bad news first” approach

There was no clear steer from the responses which of these options is most favoured, so further analysis of the options is required to decide on a way forward.

Interactivity: Next steps for 2019

Jan Feb Mar Apr Jun May Jul Aug Sep Oct Nov Dec

Sub-deliverable d) - T-D interactivity process Sub-deliverable a) - Review consultation responses and publish good practice Scoping & team set-up Sub deliverable e) - T-D interactivity Sub-deliverable b) - review existing D-D interfaces Sub-deliverable c) - D-D interactivity process Sub-deliverable e) - identify possible code changes

Energy Networks Association Future of P2: Security of Supply

Vincent Hay (ENA)

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• ER P2 – Security of Supply has been in place since the 1950s and has played a

major role in the development of secure, reliable distribution networks.

• Mandates the minimum levels of security of supply DNOs are obliged to provide by

specifying required levels of capacity (Group A-F) and redundancy (n-1, etc)

• P2/6 is commonly referred to as a deterministic or minimum standard
• Compliance with P2 is predominantly achieved through assets. E.g. circuits and

transformers

• DNOs can self derogate from the requirements for groups <60MW or exceed the

standard

• P2 underpins significantly underpins DNO investment plans including asset

replacement and load related activities

• Engineering Report (EREP) 130 “Guidance on the Application of P2. Security of

Supply” supports application of P2

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Engineering Recommendation P2

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• Distribution Code Review Panel is the governance body overseeing

development of P2

• Compliance with P2/6, is a DNO licence condition.
• Industry work necessitated a review of the standard.
• Wide recognition that smart network technologies and more flexible

demand and generation can be used to more efficiently provide security of supply.

• In 2014 the DCRP set up a sub group to undertake a review of the

existing standard

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DCRP P2 Review

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• 9 Work Streams
• More Information

http://www.dcode.org.uk/dcr p-er-p2-working-group.html

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P2 Review Work - DNV-GL/NERA/Imperial

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• The review analysis identified that in the event of significant Low Carbon

Technology (LCT) growth, strict adherence to P2 may result in over investment in the networks.

• The review suggested that a range of factors should be considered when setting

the minimum standard, and that this should vary dependant on the situation. Factors included:

• The reliability of the network to which customers are connected
• The ability of the DNO to restore supply through operational means
• The likely repair time
• The customer mix and Value of Lost Load
• The study suggested that subject to a high growth scenario, savings could be up to

£18bn, however at an additional economic cost of up to £3bn due to an increase in interruptions to customers electricity supplies.

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P2 2016 Review - Findings

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• The revised approach would result in a change to the reliability of electricity customers receive,

most notably by impact on reliability (measured as Customer Interruptions and Customer Minutes Lost):

• Reduced redundancy would have an adverse effect
• Some of this could be mitigated by increases in network automation and focused risk reduction, for

instance High Impact Low Probability work

• Cost of Condition Based Investments would increase (as Load Related Investments would be less and so

not synergised)

• Less available capacity in the system for quick takeup of Electric Vehicles and other Low Carbon

Technologies

• The revised approach would require a wholesale change to the approach DNOs take in planning:
• P2 Standard (ENA)
• Load Related Investment criteria (Load Indices - Ofgem)
• Quality of Supply investments (Ofgem)
• Outcome of the review was that feedback would be used to create new version of P2 – P2/7 to

deliver the benefits of the review recommendations

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P2 2016 Review - Findings

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• P2/7 redrafted and following public consultation issued to Ofgem for

approval on May 2018

• Clarifying EREC P2 as being a standard defining the security of supply that is to be achieved,

whilst EREP 130, becomes the document describing how that security of supply should be achieved;

• Formally incorporating Distributed Energy Resources (DER) into EREC P2;
• Removal of F-Factors and other tables associated with assessing the security contribution from

Distributed Generation (DG) which is already duplicated in EREP 130;

• Refreshing the definition of demand to appropriately include consideration and treatment of

flexible resources such as DG and Demand Side Response (DSR); and

• Specifically excluding the security of supply to DG installations from the scope of EREC P2 as

justified by the consortiums analysis and findings.

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Recent Work – P2/7

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• EREP 130 redrafted and following public consultation issued to Ofgem for

approval on March 2019

• Align EREP 130 with EREC P2/7;
• Provide new guidance on assessing the contribution to security from, and the latent demand

associated with, Distributed Generation (DG), Demand Side Response (DSR) schemes and Electricity Storage (ES);

• Update the F factors for assessing the contribution to security from Distributed Generation, using

recent data from DG, based on work carried out for ENA by Imperial College London.

• Differentiate between the contribution to security from DG, DSR and ES which is contracted with a

Distribution Network Operator (DNO) and that which is not; and

• Restructure the document to improve the flow of the guidance, based on a revised step-by-step

flow diagram (see Figure 1 EREP 130 Issue 3)

• Provide ability for DNOs to carry out Cost Benefit Analysis to justify non-compliance with P2/7 Table

1 standards where reinforcement cost prohibitive or where it would not provide sufficient customer benefit.

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Recent Work – P2/7

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing

• The Authority has given the DCRP the directive to engage with

Stakeholders on options for a future P2/8 standard

• The Authority mandated that the P2/8 development work needed to be

inclusive of affected Stakeholders

• The Open Networks Advisory Group were identified as being a group of

stakeholders who would be a good starting point to re-establishing engagement in the P2 work stream.

• Major trade and business associations were also identified as a means of

reengaging with affected stakeholders.

• Nominations for representation on a Working Group are being sought by

the DCRP and ENA as Distribution Code Administrator

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Future Work – P2/8

Distribution Code Review Panel – Engineering Recommendation (EREC) P2 – Open Networks Advisory Group Briefing 33

Next Steps

• Working Group History – http://www.dcode.org.uk/dcrp-er-p2-working-

group.html

• Next Steps
• A DCRP Working Group has been mandated to be re-established to guide the

direction of the P2/8 Work Stream.

• Stakeholders interested in participating in the P2/8 Working Group to contact

Distribution Code Administrator at dcode@energynetworks.org by 17:00 on 16 May 2019. The first meeting has been scheduled for TBC (late May/early June)

• Stakeholders interested in subscribing to updates specifically on P2, see link
• attached. Sign-up/subscribe here or contact the Distribution Code Administrator

for more information

Energy Networks Association Breakout Session: Workstream 1A – Flexibility Services

Product 2a: DSO Services – Procurement Processes Ian Pashley (National Grid ESO)

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WS1A P2A – Procurement Processes

Engagement Information Provision Clarity and Simplicity Learning by Doing Multiple communication paths

This slide pack summarises DNO feedback from DSO Service procurement activities to date. It is structured around the standard procurement process defined in Open Network 2018, with Good Practice, Learning Points and Gaps identified.

Overview: Key Themes:

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Process Recap: New Service Development

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Process Recap: New Service Development

Step 1 Identify Network Limitations ENWL Service needs identified through annual network loading review process. Locational data provided in tabular format. Good response from DER, but all were non-compliant with minimum criteria, suggesting requirements need to be more clearly articulated. NPG Annual distribution load forecasts are carried out to establish sites at risk of going over- firm, following this P2/6 assessment is undertaken. SPEN Service needs identified via standard information provided by system design including a review of planned reinforcement schemes. Simple template approach for relevant data could be standardised for publication. SSEN Service needs communicated using network forecasts from system planning in standard

• templates. Benchmarking costs (against traditional reinforcement modelling) as a starting

point to identify maximum service value for alternative DER services. UKPN Service needs identified using high-level defined process. Requires refinement and clear responsibilities and accountabilities, as well as consulting and informing as necessary. WPD Service needs driven by detailed network understanding and financial drivers. Seek to collect as much detail as possible from across the business to deliver useful service. Good Practice: Standardised process linking services with investment planning Learning Points: Need to ensure provision of the right information to those developing the service

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Process Recap: New Service Development

Step 2 Service Development ENWL Broad industry engagement, supported by direct contact with customers within constrained

• areas. Feedback led to standard service categorisation and review of timing for flexibility

service calls and information NPG Bottom-up approach using network needs and ability to integrate services into current

• systems. Delivered services that meet NPG network needs. Development took 1 year –
• ptions for streamlining process were identified.

SPEN Network constraints drove service specification/parameters. Contract designed to capture commercial and technical terms. SSEN Service parameters based on network requirements identified by system planning, pricing points benchmarked against traditional reinforcement and developed with DER stakeholder engagement. UKPN Service developed using broad stakeholder engagement and learnings from past procurement activities, innovation projects and review of other current products. WPD Services designed to provide value and balance needs with simplicity and revenue

• stackability. Compromise between network needs and workability for customer.

Good Practice: Ensure clear linkage between service and network need Learning Points: Stakeholder engagement to inform service structure

39 Step 3 DNO and SO Coordination ENWL Liaison through Open networks. NPG Liaison through Open Networks. SPEN Liaison through Open Networks. SSEN Liaison through Open Networks. UKPN Bilateral engagement with NGESO; response to consultation on product standardisation. Open Networks acting as forum to resolve challenges with designing for interactions between flexibility services. WPD Some early engagement on service design pre-trial. Good Practice: Sharing of information; mutual understanding Learning Points: Benefits of collaboration to promote service compatibility

Process Recap: New Service Development

40 Good Practice: Broad comms through a range of different routes generates interest Learning Points: Web-based and interactive forums add real value for both parties Step 4 Engage with Potential Providers ENWL Direct contact with known aggregators, developers and customers. Broader engagement via webinars, social media and existing newsletters. Subsequent initiatives used Piclo, alongside a more tailored approaches, such as bulletins with registered parties. NPG Stakeholder events were found to be most valuable, offering face-to-face interaction with targeted groups (e.g. based on locational need). SPEN Piclo, website, e-mail and forums. Webinars may also help. Important to ensure potential providers understand what they could offer. SSEN Direct engagement with interested DER parties, supported by standard EU regulated procurement process ‘Tenders Electronic Daily’ (TED). TEDs releases provided reassurance though time-consuming and limited reach. Direct engagement is valuable, though lack assurance. UKPN Engagement entails participation in industry forums, bilateral meetings, webinars, and wider

• consultation. Also, using platforms (Piclo) has been a step change to facilitate more effective

engagement and to signpost service requirement. It is resource-intensive, but necessary to ensure decisions are justified. WPD Webinars were used, and were found to add real value, both for potential providers as a source of information/discussion, and for WPD in the ongoing development of services.

Process Recap: New Service Development

41 Step 5 Review and Finalise DSO Service ENWL Detailed requirements clarified and documented in both bulletins and RfP information. Identified a need for more clarity for response, duration and recovery times. NPG Vital to take into account stakeholder feedback taken at an early stage – including but not limited to type pricing structure and term of contracts. SPEN Articulating requirements by map/postcode helped engagement with potential providers. These were initially communicated via Piclo, then incorporated into BAU heat maps. SSEN Early DER engagement and ideas generation supported flexibility solution to system need. Detailed contract approach risks putting off potential providers, with some requirements considered restrictive. A more open process may help here – to be investigated in future. UKPN Requirements formalised in ITT documentation, incl. a standardised contract, which was consulted upon and subsequently amended. Such an example could be the revising of the capacity thresholds for flexibility services WPD Products updated following feedback. Further descriptive material added to website. Scale

• f required engagement shouldn't be underestimated.

Good Practice: Using feedback from potential providers to inform service terms Learning Points: Use of standard approach across D licence areas can aid understanding by potential providers

Process Recap: New Service Development

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Process Recap: Procurement

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Process Feedback: Procurement

Step 6 Identify Procurement Requirements ENWL Requirements are based on network loading analysis, assessed using Real options Cost Benefit modelling and response categories (and characteristics). Minimum thresholds have been reduced to encourage participation. NPG Forecast load to identify sites at risk of going over firm, followed by P2/6 analysis of those

• sites. Clear articulation of resulting requirements (where, when, why, how often, etc).

SPEN Requirements identified and posted on Piclo, with web links for further information. Combined approach, with targeted communications, drove an increase in providers. SSEN Requirements identified through system planning and published on Piclo. Communicating requirements through TEDs offered mixed results; calls for services that aligned with NGESO’s STOR tenders received greater interest than stand-alone calls. UKPN Service requirements derived from network needs by consistent analysis of site load data. Requirements published on Piclo with website links. WPD Requirements derived through planning process. Clear requirements maps/tables published, but conveying geographical requirements was more difficult than expected. Good Practice: Clear translation of network needs into flexibility requirements Learning Points: Make information as accessible as possible, to simplify engagement

44 Step 7 Assess Market ENWL Requirements placed on Piclo, with follow-up bulletin, plus direct contact with DER for specific needs. Minimum requirements reduced to promote participation. NPG Undertook EoI through Piclo to get an indication of state of the market in areas of interest. Followed up with bilateral meetings with interested DER operators. SPEN No response. SSEN Requirements posted on Piclo and TEDs and assessed using standard templates, followed by direct engagement with interested DER parties. UKPN Reviewed main flexibility services to understand interactions (e.g. influence of their characteristics, parameters and procurement approach). Use the outcome of the tender to understand the ability to use market based services. WPD Compared required volume with likely provision in target areas, and assessed cost exposure at fixed price. EOI and PQQs used, however DNO records of DERs have not – focus instead

• n separate DER engagement. Wider engagement needed to increase reliability of early-

stage assessments. Good Practice: Open assessment of readily available info, plus use of EoI Learning Points: Assessment of market needs to be sufficiently broad

Process Feedback: Procurement

45 Step 8 Industry Engagement ENWL Bilateral discussions with interested parties and broader engagement via Piclo, ENWL website (‘flexibility map’) and social media. Important to proactively reach out to potential providers, who might not otherwise engage. NPG Similar approach used to ‘assessing the market’ as well as using ICE action plan as a route of engaging with key stakeholders. SPEN Flexibility tenders trailed at stakeholder events. Engagement via Piclo, website and targeted

• email. No specific approaches from DER though until PQQ period began.

SSEN Social media and Piclo supported by bilateral discussions. Interested parties directed to TEDs and Piclo platforms. Suggest aligning procurement with NGESO events, or combining T-D approach to encourage participation. UKPN Webinars, bilateral meetings and workshops run, as well as attendance at industry events to promote activities. Important to allow enough time for activities within procurement timeline. WPD Existing stakeholder lists, media/social media, webinars, meetings and calls. Noted as requiring new relationships beyond the traditional DNO sphere, which can be challenging to develop initially. Good Practice: Broad range of engagement types, with tailoring to different groups Learning Points: Challenging to communicate benefits/potential income to DER

Process Feedback: Procurement

46 Step 9 Expressions of Interest ENWL Website is used as a central information hub, with all communications pointing to that to ensure consistency. Where possible, EoI information is used in the next stage of procurement, to minimise duplication for participants. NPG Piclo allowed interest to be gathered from national players, however was less successful for smaller DER, local communities, etc. So a different approach was adopted for these. SPEN No formal RFI issued, but requirements placed on Piclo and website. Earlier provision of more information may be of benefit. SSEN Piclo and TEDs platforms used for EoI stage, with follow up RFI to provide high level requirements prior to PQQ stage. UKPN Requirements placed on Piclo and at UKPN site, to allow need to be matched with

• resources. As processes mature, importance of EoI stage may reduce.

WPD EoI now replaced with PQQ. For OJEU compliance the PQQ is provided directly to DERs have responded to official notice. Formal OJEU process adopted following experience from initial roll-out where some providers completed the EoI and went on to sign contracts but didn’t progress to service provision due to lack of confidence. Good Practice: Concise publication of all relevant information Learning Points: EoI process needs to be structured to attract as much engagement as possible

Process Feedback: Procurement

47 Good Practice: Competitive procurement promotes efficiency; facilitates compliance with procurement law Learning Points: DER require ability to understand potential earnings/longevity of requirement, to support investment Step 10 Procure ENWL All requirements are pursued via open tender. Prices for availability/utilisation, and other parameters, are assessed against minimum specification criteria. Procurement is via WAX digital portal. NPG None to date, but likely to pursue an auction process assessed against ceiling price. SPEN Full price-discovery sought by competitive tender. Assessed against ceiling price. SSEN None to date, but likely to pursue an auction process assessed against reinforcement benchmark UKPN Pay-as-bid, blind tender. Framework agreement signed prior to bidding. Balance between standardisation and maintaining flexibility to reduce barriers to participation. WPD Fixed prices are offered to providers. Process is evolving to market led pricing based on liquidity/experience. Original approach was framework-based with no formal tender. Latest procurement is tender-based, and OJEU compliant.

Process Feedback: Procurement

48

Additional Process Step: Testing and Pre-Qualification

Despite some differences, testing and pre-qualification provisions are broadly consistent:

• Generally undertaken at a Company level
• Seeks to ensure financial standing, etc

Commercial Pre-Qualification

• Technical capability per site, and method of provision
• Same process whether for individual or aggregated sites
• Generally ask questions regarding provision of services to others, to understand potential

impact on provision of services to DNO Technical Pre-Qualification

• Where testing is undertaken, parties tend to bear their own costs
• Timing varies – generally ahead of delivery, but can be after contract signing
• Delivery against service parameters is equivalent to a ‘pass’
• Ongoing monitoring/non-delivery provisions vary

Testing

49

Questions for Advisory Group discussion

Q1: What benefits are there to co-ordinating flexibility procurement between ESO and DNO?

• How should we co-ordinate? What form should that co-ordination take?

Q2: How would you prefer to engage with DNOs/NGESO to offer services?

• E.g. companies’ own websites, platforms, e-mail…

Q3: How best should DNOs assess the market?

• Is there a more efficient way of assessing the market, other than EoI?
• What is your appetite for engaging in each round of the procurement – EoI, PQQ, ITT

without certainty of useful contract at the end of it?

Energy Networks Association Breakout Session: Workstream 1A – Flexibility Services

Product 4b: DSO Services – Commercial Arrangements Jason Brogden (ENA)

Purpose of today

A. To inform stakeholders of

• Product progress and outputs
• Work programme and development of content (to date & future)

B. To seek feedback on

• Areas of good practise identified by the WG
• Areas which need further focus

51

Product 4 – Commercial Arrangements

Ultimately the work will establish good practice and commonality across the commercial agreements for flexibility services. The following good practise points are not an exhaustive list but represent an example of the good practise points identified by the Product Team.

Product Overview

Aim to provide commonality and good practice guidelines across contracts/service agreements for:

• Provision of network

services

• Management

mechanisms for those services

• Alignment between

DSO’s and NGESO for service parameters. 52

Product 4 – Commercial Arrangements

Jan - Apr

• Review current flexibility service agreements across DNOs
• Identify good practice

Mar - Jun

• Identify requirements
• Develop implementation plan for taking forward the staged approach to achieving

commonality Jul - Sep

• Develop good practice for alignment across DSO and NGESO services
• Areas: timescales, service windows and contract terms (to include the applicability of

‘exclusivity’ terms and scope to participate in multiple markets) Oct - Dec

• Consider mechanism for consistent and effective review/validation of service provision &

feedback loop for service providers (e.g. Consequences of defaulting under contract)

• Identify rights and obligations for driving contract performance that can consistently be used

across DNOs.

Contract terms

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Product 4 – Background Contract Terms

Parties

• 11. Optional Services
• 22. Indemnity
• 30. Termination

Recitals

• 12. Assignment, Sub-contracting and

Transfer

• 23. Compliance with Legislation
• 31. Invalidity and Severability
• 1. Definitions and Interpretation
• 13. Contract Personnel
• 24. Confideniality and

Announcements

• 32. Waiver
• 2. Nature of Contract - Recitals
• 14. Provider's Performance

Obligations Publicity

• 33. Notices
• 3. Duration

CDM Company Property

• 34. Third Party Rights
• 4. Services to be provided by the

Provider

• 15. Terms of Payment

Access

• 35. No Agency or Partnership
• 5. Pre-Delivery
• 16. Event of Default
• 25. Anti-Bribery
• 36. Survival

CMZ Capacity and CMZ Energy Nomination

• 17. Variations

Modern Slavery

• 37. Entire Agreement
• 6. Monitoring by the Company
• 18. Site and Facility Maintenance

Living Wage

• 38. Inadequacy of Damages
• 7. Proving test
• 19. Insurance
• 26. Reputation
• 39. Remedies Cumulative
• 8. Monitoring by the Provider
• 20. Intellectual Property Rights
• 27. Data Protection
• 40. Governing Law and Juristiction
• 9. Utilisation Instructions
• 21. Warranty Obligations
• 28. Force Majeure

Schedules

• 10. Declarations of Unavailability

Liability

• 29. Dispute Resolution

Supporting documents

Legend

Commonality pre- existing Good practice Identified in P4 Good practice identified following legal analysis and stakeholder feedback Variation Expected (Scheme specific)

Examples of good practise – General

• The need for a glossary/definition of legal terms which can be universally applied/utilised across DSO’s to support service

agreement utilisation.

• The unification of role terms within service agreements, i.e. ‘the customer’ ‘the supplier’ or ‘the company’ ‘the provider’

etc as multiple variances are apparent across (and even within single) service agreements.

• The utilisation of web pages/portals to present a wide array of supporting documentation, schedules and service

agreement examples enables a far higher accessibility vs the specific issue of documentation within single tender exercises.

• Defined and easily available supporting documentation, guidance notes and feedback forms reduce the need for more

complex service agreements, again increasing accessibility and ease of utilisation.

• Pre-release or accessible website-based example agreements are also useful, allowing potential DER providers to review

contractual elements pre-procurement process and to raise concerns/questions before the regulated process commences. In some cases, these could be the subject of consultation before release, enabling a group of potential providers and industry incumbents to offer comment and possible points of adaptation prior to formal release.

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Product 4 – Commercial Arrangements

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Product 4 – Commercial Arrangements

Examples of good practise – Variations Background information Variation terms contractually enable the ability to increase, decrease or alter the services provided within the contract/agreement, not to vary the terms of the agreement itself.

• For example, a contract/agreement may specify that 5MW and 10MWhs are to be provided between 18:00 and

20:00 on weekday evenings Oct-Nov.

• A possible variation to this would be for the DNO to request an additional service window over the weekend during

these months, or to look for another 2MWhs up to 20:30.

*Not all DNO’s currently utilise these specified, pre-set service times in their contracts/agreements.

Examples of good practise – Variations

• If additional power inject/demand reduction are required this should not result in a agreement alteration, new or

additional requirements should be the subject of a new service agreement and procurement exercise.

• If service windows change, but power requirements remain the same, the market should be tested to see if

alternate providers are available before seeking to alter an existing agreement.

• Short-term variations, resulting from marginal, infrequent, one-off and time-restricted changes (e.g. sporting

events, unseasonal weather, national events such as elections) should be allowed and requested only if a) there is no change to the overall agreement value, and, b) the variation doesn’t result in additional or extra service requirements which should be the subject of new procurement processes.

• Providers must advise of any change in registered DER subject to existing service agreements, change include an

increase/decrease in capacity, type or technology changes.

• Service agreements which allow providers to change the asset(s) providing the service, dependant on a review of

suitability against the service location and requirements, should be adopted. These terms enable providers flexibility across a portfolio of assets and provide additional assurance against development and performance issues

• f individual assets.

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Product 4 – Commercial Arrangements

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Examples of good practise - Duration Background This section relates to the duration of the contract/agreement for services and ability to extend the contract itself, not the durations of the power injection, demand reduction or additional services. For example, SSEN’s CMZ contract duration is currently a 4-year contract with the ability included to extend on a yearly basis to a maximum of 6 years (4+1+1).

Product 4 – Commercial Arrangements

Examples of good Practise – Durations

• The application of re-opener stages to contract durations are an example of good practise. For rolling

contracts and longer duration contracts the product team recommend a maximum of a 5-year period between re-opener stages, with the option for these to be more frequently re-opened to new competitions as required.

• The restriction or removal of contract extensions is also seen as an example of good practise, service

agreements which enable extension after a fixed period could exclude new market entrants from competing, so should not be referenced within agreements. While 4 or 5-year contracts remain a possibility, 5 years should be the maximum contract length, and at this point the requirements should be subject to a new procurement or re-opener stage where the market can respond to the extended requirements and not just the incumbent supplier.

• Agreement durations should remain responsive to the locational and business drivers which define the

flexibility service, implemented by the DSO as required. Agreement duration requirements will naturally evolve and durations reduce as markets mature and flexibility service management systems enable day ahead and real-time markets to become fully responsive. As such the product team have not specified an

• ptimum agreement ‘duration’ as this could be restrictive until the market has matured sufficiently.

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Product 4 – Commercial Arrangements

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Indemnities, Liabilities and Insurance Background

While standard contractual terms, to date there have been distinct variations in the application of requirements across flexibility service agreements/contracts. The WG appreciate the conflict between the service providers need for agreeable, achievable levels of cost exposure against the DNO’s need to ensure risks are minimised and potential for asset damage and subsequent costs are covered through the terms. While the Product team have identified some high level good practise points, the product is also likely to highlight that further regulatory or senior stakeholder input is required to define possible next steps. While stakeholder feedback would suggest support for DNO’s absorbing these costs/higher risks, the recollection of costs through regulatory incentives or even 3rd party funds supporting these providers, there is an apparent risk of distorting competition in these cases. Alternatively, by implementing caps to insurance and liabilities could enable larger organisations to manipulate services, open the markets to ‘gaming’ and result in the socialisation of costs which larger organisations are able to and have traditionally absorbed..

Product 4 – Commercial Arrangements

Example of good practise - Indemnities, Liabilities & Insurances

• Insurance – ‘Supplier to maintain adequate insurance’ - removing specific figures in place of

supplier and service specific agreements which can reflect the contract or service values, and/or the application of expected insurance figures within schedules.

• Liabilities – DSO/Provider equivalent ‘caps’ avoiding provider weighted specific figures (while

retaining the exceptions for death & personal injury), the proposed figure for this cap is £2m (although based on the previous section the product team are likely to seek additional guidance).

• Indemnities – clearer, common approach required across the DSO’s in terms of clauses or

cross-referencing. These three clauses (and to a lesser extent Warranties) are frequently cross referenced or appear ‘muddled’, agreeing clearer use of language and avoiding cross- referencing where possible will offer clearer and simpler agreements

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Product 4 – Commercial Arrangements

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Product 4 – Commercial Arrangements

Outputs & next steps

• A summary of the questions and responses will be included in the P4 Report which will be finalised and

submitted for approval in April 2019.

• Once approved, the working group will then define the implementation plan and timeline for achieving

commonality which will be submitted for approval in June 2019.

Energy Networks Association Breakout Session: Workstream 2 Product 1 System Wide Resource Register

Steve Halsey (UKPN) & Rebecca Lees (SSEN)

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Introduction & Objectives

What would the System Wide Resource Register be?

• A single place to get information on all distributed resources and associated reinforcements.

Potential Benefits:

• Improved project developer planning of new resources and connections.
• Improved network company planning of connections and network investment.
• Definitive information to support wider infrastructure policy and planning.
• Might be used to identify potential service opportunities and DER service providers.

Objectives:

• Provide a single resource register for use by network companies and wider stakeholders.
• Make this easy to access, comprehensive, up to date, accurate and consistent across DNO areas.
• During 2019, demonstrate a clear business case, agree the approach, and move to implementation.
• Have clear support from stakeholders including networks, developers and others (e.g. EDTF).

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WS2 Product 1 Programme Through 2019

Jan 19 Feb 19 Mar 19 Apr 19 Jun 19 May 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19

Sub deliverable f) - Prepare business case & proposal Sub-deliverable a) - Set up webpage to access GB data Sub-deliverable c) - Requirements & proposals for code changes Scoping & team set-up Sub deliverable i) - Take forward code changes for Wider DER Register Sub- deliverable g) - Establish network company processes for DER Register Sub-deliverable b) - Monitor use of webpage & feedback Sub-deliverable d) - Analyse & agree data requirements Sub-deliverable e) - Detailed options for GB System Wide Resource Register Sub- deliverable h) - Finalise & implement system improvements for DER Register

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Interim ENA Webpages

Clicking the “Call To Action” for a DNO

• n the first page will take you to a

second level page. Available data for each DNO will be tabulated on the second level together with links to the relevant areas of the DNO website.

Interim Webpages

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Interim ENA Webpages

• The interim ENA webpages will be made live after today’s

session

• We will monitor use of the pages and we are seeking

feedback on the content from users to help design and make the case for the enduring solution.

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Data Field Scoping

DER Resource Register Fields

• Resource Register fields were agreed

during 2018. Some changes to these are being made to align with the available system wide data.

• For example, some contracted

capacities are expressed in MW and some in MVA. Both MW and MVA fields must therefore be included and populated in the register if figures are to be aggregated.

Field Tag Field Descriptor Public/ Restricted Customer Name Name of party contracted to connect Public Customer Site Name of customer site/project name Public GSP Grid Supply Point linked with Customer Site Public Point of Supply Electrical position where the equipment in customer site connects to the transmission or distribution network. Public Primary Name of relevant primary substation Public MW Connected Total MW connected at Project Site Public MW Contracted Total MW contracted in Construction Offer, not connected Public Export MW Capacity Total MW capacity permitted as per connection agreement Public MW Change (+/-) Future planned increase/decrease in contracted export capacity Public Effective Date MW Change Date upon which the ‘MW Change’ becomes effective Public Type of Connection Firm/Non-firm/ANM etc?? Public Date Contracted Date customer contracted with GBSO/DNO/IDNO Public Date Connected Date Project connected to network Public Licence Area Licence area project site is connected within Public Plant Type Type of plant connected at the site (wind/solar/etc) Public Service Provider (Y/N) Has project registered as a service provider with host DNO, GBSO, Aggregator or Supplier Restricted Type of Service Description of type of service being provided Restricted Contract Duration Duration of service provider contract Restricted Exclusivity Does service provider contract required customer site to limit provision of services to other parties Restricted

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Enduring Solution Options & Decision Criteria

• We are progressing different
• ptions to implement the

resource register.

• Costs, timescales, code

implications etc are being evaluated through to July to support an implementation decision.

• Stakeholder views are critical.

Options: 1) No central DER register. 2) Retain interim solution. 2a) As 2) with alignment of DNO fields. 3) Build centrally hosted database solution. 4) Combine network company LTDSs. 5) Extend ESO Embedded Register. 6) Other (e.g. linked to RecorDER project). Decision Criteria: 1) Costs to implement. 2) Ongoing costs to operate. 3) Licence & Code Implications. 4) Timescale for Implementation. 5) Stakeholder Views on Option. 6) Compatibility & ease of use. 7) Does Option Deliver Full Scope? 8) Is Option Scalable?

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Confidentiality Issues

• We have collated network

company expert views to better understand confidentiality issues.

• Network code & contract

changes are likely to be required to enable all data to be shared.

• Further legal advice is being

sought.

• Working closely with EDTF.

Confidentiality Concern

Network companies may not be permitted to share or publish information

• n connectees due to legislation. In particular, the Utilities Act Section 105

prevents network companies from disclosing information except under certain circumstances, for example, to meet a Licence Condition. Network companies may not be permitted to share or publish information regarding connectees due to specific clauses in connection agreements. A related issue is that some customers will not want data to be disclosed in a resource register as they would prefer not to disclose the identity and location of facilities such as data centres or critical infrastructure sites. Contracts covering balancing and network services may be commercially

• confidential. Clauses in these contracts might prevent network companies

from sharing even high level information such as service type & exclusivity.

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Questions for Advisory Group

What are you likely to use the data register for? What are the key areas of data? How would you prioritise the following – accuracy, granularity, completeness & frequency? What are the relative benefits of the different options? What other solution options might be feasible? Are the decision criteria good? Are some criteria more important? How should the costs of the preferred solution be recovered? How can we get further feedback from your wider stakeholders? Would a more detailed discussion be helpful (e.g. a webinar or a focus group)?

Energy Networks Association Wrap Up

Jason Brogden (ENA – Open Networks Project Director)

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Wrap Up

There are some challenges ahead if we want to meet our carbon targets while providing a safe and secure energy grid at an affordable price. However, by enabling flexible networks we can address these; open up new markets for customers for low carbon and innovative technologies; and deliver efficient network costs for consumers. We are working together and dedicated to making this work with input from stakeholders in an open and transparent way. Please remember to complete the feedback poll on Slido. 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.