Utility Week

18 | 20TH - 26TH JULY 2018 | UTILITY WEEK Finance & Investment Over the three years that Utility Week and CGI have been looking at the strategic sig- nificance of flexibility to the power system, expectations have been high – and this year was no different. Respondents to this year's survey (2018) rated the strategic significance of flexibility to their business at 6.6 pres- ently, expecting it to grow nearly one-third to 8.7 by 2030. While this is very slightly lower than the expectation of significance by 2030 recorded in the 2016 survey (9.1), it is exactly the same as the 2017 survey and shows in both cases similar expectations of growth. Breakdown by audience group Breaking down responses by audience group, it is little surprise that aggregators and flexibility providers give the highest rat- ing to the strategic significance of flexibility to their business, now and in 2030 (8.3 and 9.2 respectively). It is interesting to note that system operators are the next highest (8.3 and 9) and DNOs the third highest (6.6 and 8.9), while all respondents come in at 8.4 or higher by 2030. But where will this flexibility come from? Respondents overwhelmingly felt that the contribution of grid-scale storage and demand-side flexibility to overall flexibility in the power system needed to rise massively by 2030. On average, respondents rated the current contribution of the two solutions at 4.6, and said it needed to rise by a huge 72 per cent, to 7.9, by 2030. Breaking down the responses by audience type, aggregators and flexibility providers had the lowest current view of the contribu- tion of grid-scale storage and demand-side flexibility, at 4.3, and the highest view of its required future contribution, at 8.1. The policy landscape Since our last research in 2017, there have been a number of policy developments relat- ing to flexibility in the power system. The importance of such flexibility is now clearly recognised at ministerial level, and govern- ment is attempting to clear a number of the barriers that our earlier research identified. In July 2017, the long awaited Smart Sys- tems and Flexibility Plan was published jointly by the Department for Business, Energy and Industrial Strategy and Ofgem. This was expected to clarify what the new markets for flexibility would look like, and set out a roadmap for establishing them. The Smart Systems and Flexibility Plan was seen as the second most significant ini- What the results tell us WHEN WILL YOUR ORGANISATION SEE EACH OF THE FOLLOWING AS OPPORTUNITIES ARISING FROM ENERGY FLEXIBILITY? PLEASE SELECT A TIME PERIOD FOR EACH. Percentage who see opportunity 'now' (top 5) TO WHAT EXTENT WOULD YOU RATE YOUR ORGANISATION'S CURRENT ABILITY TO REALISE THE BENEFIT OF EACH OF THE FOLLOWING OPPORTUNITIES ARISING FROM ENERGY FLEXIBILITY? System Generators DNOs Suppliers Aggregators operators and traders and flexibility providers DNO-SO demand-side flexibility sharing – 7.0 6.5 – 6.0 The creation of a market platform for trading demand side flexibility 7.0 – 5.4 6.5 6.7 Utilising storage and demand side flexibility to balance the network 7.5 7.6 6.1 7.0 7.7 Utilising flexibility to avoid the need for new infrastructure 7.0 6.5 6.4 4.4 5.2 Providing industrial and commercial demand-side flexibility 5.0 7.0 5.8 7.1 7.7 (Importance on a scale from 1 to 10. Average scores out of 10) HOW IMPORTANT ARE EACH OF THE FOLLOWING DRIVERS FOR FLEXIBILITY TO YOUR ORGANISATION? Overall System Generators DNOs Suppliers Aggregators operators and traders and flexibility providers The capacity market 6.0 6.0 6.4 4.9 6.9 6.8 Balancing the transmission system 6.7 9.0 7.0 6.0 6.7 7.5 Efficient management of energy portfolio 6.8 6.0 8.4 5.6 8.0 8.0 Household and business customer experience and retention 7.1 8.0 5.6 6.5 8.7 7.8 Household and business customer proposition 7.1 6.7 5.8 6.1 8.6 8.5 Constraints management 7.2 7.7 6.2 7.8 6.5 6.6 New business opportunities 7.3 7.7 6.2 6.7 7.8 8.0 Operating, including balancing, the distribution system 7.7 8.7 4.6 9.1 6.8 6.7 (Importance on a scale from 1 to 10. Average scores out of 10) DRIVERS AND OPPORTUNITIES FOR FLEXIBILITY System operators Generators DNOs Suppliers and traders Aggregators and flexibility providers DNO-SO demand-side flexibility sharing The creation of a market platform for trading demand-side flexibility Using storage and demand-side flexibility to balance the network Using flexibility to avoid the need for new infrastructure Providing industrial and commercial demand-side flexibility 47 10 33 33 28 13 30 67 67 59 53 100 33 33 76 53 50 33 33 65 80 100

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