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NETWORK / 11 / MARCH 2020 into the RIIO-ED2 price control framework. But I wonder if the DNOs are thinking, 'what bit of the DSO agenda shall we invest in now?'. [Without clarity from Ofgem] it's a bit chicken and egg." Nevertheless, as he points out, the transition is making itself felt on the DNOs' corporate structures. "Many of our contact points in the DNOs have picked up new and huge responsibili - ties, such as head of flexibility, and they're actively recruiting their teams. It's an area of great interest and relevance, it's great to work with our customers and there's all to play for, for us and the whole industry." Northern progress With no universally agreed definition of a DSO, the DNOs are free to define their own. At Northern Powergrid, head of regulation and strategy Jim Cardwell identifies three key parameters: managing a more complex connection landscape and acting as a catalyst for de - carbonisation; interfacing more effectively with the electricity system operator (ESO) and shar- ing data that allows Northern Powergrid full visibility of what's on its network; and creating a "universal service offering", or consistency in connection processes across its operations and those of other DSOs. Against these criteria, Cardwell is confi - dent that Northern Powergrid is making good progress. "We'd say we think we're already behaving like a DSO – only one organisa - tion has operational responsi- bility for the grid in Yorkshire and the North East, and that's us. Increasingly, our focus is on flexibility and an active grid, which is synonymous with a DSO. We're actively managing distributed energy resources, not passively. I'm not sure there's a point you pass when you say yesterday we weren't but now we are, but we feel we are now acting as a DSO." In terms of the ESO interface, Cardwell says that it needed to "have visibility on contracts be - tween generators and National Grid ESO in our territory. We will share data between networks, so that we can see what it does to the system – we don't want to pull in different directions." Northern Powergrid has previ- ously pointed out that the scale of distributed generation on its network – at 3.3 GW – means its contribution to the national grid is greater than Hinkley Point C's will be. At Western Power Distri- bution, DSO and future networks manager Nigel Turvey can also list the company's achieve- ments. "We are well down a path in terms of what we are trying to achieve. We pushed out our DSO strategy which describes the general direction, and we got it about right – we have more visibility in our control of the network, we're using third par - ties for flexibility. We've made significant advances in the past 18 months in terms of flexibility procurement. It's a continuous process, but I think we're a long way down the road." He also describes sharing data with the ESO to facilitate full visibility, and therefore control, of its network. "To an extent it is an issue, and we have worked with the ESO on it. For instance we ran a pilot in the South West jointly with the ESO looking at issues around visibility. So we are building links between our systems, so that both sides get visibility. Historically, we haven't needed to do this, but as we get more generation on the networks, there is more need for this data." Flex auctions All of the DNOs have also adopted one of the clearest signs of transition: flexibility auctions. By setting up tender processes for storage or generating capac - ity in locations with network constraints, the DNO can defer capital investment – while be- ing compensated by financial allowances from Ofgem. In doing so, they are creating routes to market for a range of new players: community energy projects, the aggregators of new-style 'prosumers' or EV charge point operators. At WPD, Turvey was speaking shortly a¢er the company launched the largest auction yet, at 334MW. He acknowledges there is more to do, but feels that its "Flex - ible Power" brand is on track. "In our most recent tender, we had more participants look- ing to apply, so there is more confidence in the marketplace. But it's important to come up with a product that is simple to understand, has simple terms and liabilities, and is predict - able – all these things help to build confidence in a long-term market." However, at the REA, Gordon says the fanfare over the first auctions shouldn't disguise the fact that they represent a fraction of the scale needed. "We'd like to see the DNOs do more to become an enabler of "I don't think I've ever seen clearly described what a DSO actually is intended to be. There is plenty of PowerPoint- level material, but it's incredibly vague and generalised." JOHN SCOTT, ENERGY CONSULTANT "We've made significant advances in the past 18 months in terms of flexibility procurement. It's a continuous process, but I think we're a long way down the road." NIGEL TURVEY, DSO AND FUTURE NETWORKS the low carbon energy system. The auctions are at too small a scale to stimulate the market – they're still pilots, there isn't even a recurring programme in place. They should be an order of magnitude higher, for net- work stability." In evidence, he points to the blackout in August last year when a lightning strike tripped a lot of generation plant off the system. "A lot of capac- ity came offline, but energy storage came on to prop up the system; 500MW helped to so¢en the blow of the blackout." Flex providers themselves fear the auctions offer neither the scale nor the contractual terms they need. At the larger end of the scale, LimeJump offers aggregat - ed capacity from a network of in- dustrial and commercial clients, selling mainly to National Grid's Balancing Mechanism. So far, it has just one signed contract in place with a DNO. Its chief executive, Erik Nygard, argues the size of the market just isn't large enough to justify acquir - ing capacity at the smaller DNO scale. "There is not enough mar- ket size, they're kind of dabbling and testing. It is only worthwhile for us to take part when we have customer assets that are con - tracted to do other stuff [on the wholesale markets or Balancing Mechanism]. If there's a DNO tender, I don't want to acquire customers, because I couldn't make the cost of the acquisition work against the size of the op - portunity." Speaking hypotheti- cally, he says "If the whole mar- ket is 50 to 100MW, and there's maybe five to ten companies chasing it, even if I'm lucky I only get 20%. The economics are not quite there yet." Operating at the residential level is Kaluza, which has just announced it is providing WPD's live market with additional capacity from a portfolio of 20 domestic bat - teries installed in Lincolnshire homes. But Maher- McWilliams feels that many of the auctions so far have been structured to favour industrial customers and large aggregators, not the "grid edge" residential devices. "The focus should be on maximising TRANSITION TO DSO