Utility Week

UTILITY WEEK | 5TH - 11TH OCTOBER 2018 | 23 Operations & Assets Transmission Distribution Aggregation Distributed energy resources Aggregator Flexibility resources ESO Information exchange Pre-defined power exchange schedule TO-owned/operated flexibility resources TO Procurement Activation Procurement Activation Procurement Activation Activation Local energy systems Customer Procurement Activation Activation DNO DSO Energy supplier DNO-owned/operated exibility resources Figure 2.1: World A – DSO Coordinates – Flexibility market arrangements Information link Legend Contractural link Figure 2.2: World B – Coordinated DSO – ESO Procurement & Dispatch – Flexibility market arrangements Transmission Distribution Flexibility resources TO Co-operation in procurement and dispatch TO-owned/operated flexibility resources Procurement Activation Procurement Activation Procurement Activation Activation Activation DNO-owned/operated flexibility resources Aggregation Distributed energy resources Aggregator Procurement Activation Local energy systems Customer Energy supplier DNO DSO ESO Legend Information link Contractural link World B: Combined co-ordination The ESO and DSOs work together to procure and dispatch flexibility services to manage their respective constraints. There is a national market for flexibility providers connected at the transmission and distribution level that is simi- lar in nature to the current balancing market. DSOs may also host additional regional and local markets for distributed energy resources. Where new connections at the distribu- tion level cause issues across the boundary with the transmission network, DSOs submit a "transmission impact assessment" to the ESO to ensure the co-ordinated development of networks. World C: Price-driven flexibility World C is the same as world B in most aspects. The key difference is that the reforms to net- work charging and connection arrangements currently being considered by Ofgem provide strong cost-reflective price signals to market participants. They are more consistent across transmission and distribution but also vary depending on time and location. Customers make more efficient investment decisions and the need for ESO and DSO inter- vention to manage constraints is reduced. World A: DSO co-ordinates DSOs procure and dispatch flexibility services from distributed energy resources to deal with their own local constraints. They also act as non-commercial aggrega- tors for their licence areas, selling services on to neighbouring DSOs and the electricity system operator (ESO) at National Grid to meet regional and national requirements. This includes providing balancing and ancillary services to the ESO. From the ESO's perspective, DSOs behave similarly to any other party connected to the transmission network. The aggregated services they offer are considered on an equal footing to those from flexibility providers connected at the transmission level. DSOs become balance- responsible parties and establish their own settlement systems to confirm that requested services have been delivered. DSOs also manage flows to and from the transmission network based on a schedule agreed with the ESO in advance and make connection offers to new customers based on these limits. World A – DSO co-ordinates – flexibility market arrangements World B – co-ordinated DSO – ESO procurement & despatch flexibility market arrangements Source: ENA Source: ENA

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