Utility Week

Facilitating neutral markets means signposting the way, according to Western Power Distribution… Sign of the times T he future is clear – electric vehicles, distributed generation and energy storage means that customers will be using electricity in different ways. What's less certain is how and, more importantly, when their consumption habits will change. The other question is what effect new technology will have when it comes to working out the impact customer behavioural changes will have on the network. Finding the answers to those questions typically comes under the new umbrella term of 'facilitating neutral markets'. The phrase encompasses not only the idea of flexibility as a service but also the marketplace that needs to be in place to protect customers while ensuring network resilience and security. Timescales Western Power Distribution's (WPD) Network Strategy Team Manager Ben Godfrey said: "Historically the convention when we need new capacity is to reinforce but the timescales can be long: it can take three to five years to design and build a new part of the extra high voltage network. "We need to be able to move faster than that. We can do that by offering the opportunity to people with flexible resources on the network to provide their services to us. "It takes between three and six months to add flexibility to the network. It's not designed to be a permanent solution but it buys us the time to keep the network within limits and deal with the uncertainties created by changing consumer habits." Markets The markets for flexible services at distribution level are in their infancy – which means WPD is having to find solutions for needs that have never existed before. "We know that the markets can be developed because National Grid has successfully operated these at transmission level," said Ben. "Facilitating neutral markets means we have to provide equal access for all providers, whether they choose to negotiate directly with us or whether they use an aggregator. "The point of the neutral market is that we must ensure it delivers the best whole system outcomes – so we must work closely with all energy system participants – and ensure customer investment is spent wisely." There is a two-pronged approach to developing the new neutral market. The first is to establish what flexibility services – demand reduction or generation turn-up – WPD's network needs now. The second is to meet the needs of businesses that are in a position to build plant that can offer flexibility to meet potential future needs. Despite the infancy of the market, WPD is already receiving requests for guidance from businesses about where to build to gain maximum return on their investment. Signposting To help give them some direction, which will enable flexibility to be used to its full potential, WPD has launched a Signposting service. Ben explained: "The regulator has decided – and we agree – that network operators may not be best placed to invest in flexibility or storage themselves. Even though the market is only in its infancy there are people who have the skill sets to deliver flexibility more economically than we can. "But we need to demonstrate that we have the intent to start using these services so we can show that flexibility can provide an additional revenue stream to existing resources and stimulate missing markets. "With Flexible Power we go out to particular areas and ask for expressions of interest so we can try to see what flexibility exists. Signposting provides future direction and trajectory." Signposting describes WPD's predicted system needs in a particular area over a five-year period, drawn across four future energy scenarios that are co-ordinated with National Grid but have a regional flavour. The level of detail includes system needs at times of day, week and year and how many MW or MWh might be required. "Both are talking about flexible services," said Ben, "the difference is that Flexible Power describes what we need whereas Signposting describes what we might want. As a potential future requirement it will fit into a range of solutions and is not as definite as asking for expressions of interest or tenders." "The point of the neutral market is that we must ensure it delivers the best whole system outcomes" Ben Godfrey The map is available at www.westernpower.co.uk/signposting

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