Utility Week

18 | 1ST - 7TH MARCH 2019 | UTILITY WEEK Operations & Assets Roundtable Solving future system challenges now, The Covent Garden Hotel, London W hole-system" is a phrase you oen hear during discussions about energy. Being used so frequently and in so many different contexts, its mean- ing can sometimes seem vague. So, when Network and National Grid hosted a roundtable in late 2018, the first topic on the agenda was what exactly consti- tutes the "whole system". Attendees admitted the whole system could in theory refer to a variety of things and were divided on where the line should be drawn. They agreed it should at least stretch across both transmission and distribution, and across gas and electricity, with much of transport being absorbed into the power sec- tor over time. But some argued it should also cover other essential utilities, such as water. "There's been quite a bit of renewal of water assets," said one, noting the potential of water pumps to provide significant flex- ibility to the power grid. "But they're being renewed without thinking about the link with the electricity system." Others went further, saying the whole system could encompass the entire economy. Networks are ultimately there to try to save money for energy users, who are becoming increasingly involved in the running of the energy system themselves. However, another warned they shouldn't try to run before they can walk: "I wonder if the definition of whole system including eve- rything is just too wide at the moment. "You set incremental small goals and then you can broaden it out as you get fur- ther along, rather than trying to define it in a really broad way which is then impossible to make any tangible progress against." Offering incentives Unable to settle on a concrete definition, the conversation nevertheless shied to some of the obstacles that will have to be overcome. Most identified the lack of a joined-up regulatory, policy and market framework as the overarching barrier to progress. They said whole-system solutions will demand consistent price signals and incen- tives that let actors in one sphere share the gains that accrue in another, particularly in instances where they would otherwise stand to make a loss. Without these in place, they will continue to operate in financial silos and lucrative opportunities will be missed. Cross-sector incentives should be integrated into the next set of price controls. One attendee noted the difficulty in valu- ing the whole-system benefits of a particu- lar action, or even establishing the baseline to measure against. Several suggested new institutions – such a whole-system operator or multi-utility regulator – may be required to support such a framework. Another blamed its absence on the short- term, incremental thinking, which they believed had become "dominant" among policymakers. They said the government must take a longer-term, more strategic view as it did when deciding to build the national elec- tricity transmission network shortly aer the Second World War: "These assets were only fully used 25 years later. If we had had an incremental view at the time, the over- all infrastructure costs would have been 10 times larger." That said, they also recognised the scale of the challenge: "We've not really found this being resolved anywhere. The UK, given its position as an island and also the com- bination of nuclear and renewables, will be facing these challenges five to ten years before Europe and the US, for example. Can we turn this in to an opportunity and start really addressing this, and potentially lead- ing this?" Finding solutions Several questioned whether policymakers were in a position yet to move towards an enduring solution. "Frameworks will always limit what is possible by their very nature," said one. "You create a structure of rules and then you're basically saying that certain things are not allowed. "Do we think – particularly in relation to some of the absolutely massive questions we have in GB at the moment, say around The whole-system solution Attendees at a National Grid roundtable discussion – in association with Network – examined how a whole-system approach could help solve the challenges the industry faces. Tom Grimwood reports. "

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