Utility Week

UTILITY WEEK | JUNE 2023 | 25 Energy Alternatives to RIIO A similar story arises on the alternatives to RIIO, where Ofgem is proposing radical alternatives to RIIO of "Plan and Deliver" (based on the FSO developing a strategic plan with competition used to ensure cost e• ciency) or "Freedom and Accountability" (e• ectively an ex-post approach with digitalisation enabling better monitoring). In the past year Ofgem has made a positive shi‚ in its approach to network regulation with its Accelerated Strategic Transmission Investment (ASTI) programme. Within the short period of a year the ESO developed its Holistic Network Design setting out the network needed to support the anticipated 50GW of o• shore wind by 2030 and Ofgem then agreed to fund that investment. It did that within the RIIO framework and by focusing on the speci' c challenge in hand – to ensure grid capacity was not a barrier to meeting the government's targets for o• shore wind. The radical proposals that it is now putting forward build on that. But the problems faced by gas distribution are very di• erent. And the question of what worked well or not in RIIO2 is one that Ofgem is only now planning to explore through yet another round of working groups. It feels inevitable that it will end up rolling over the gas distribution price control as it suggests in the con- sultation. Given where it is in the process, it would seem to have no choice. Getting a decision on this quickly is important as the gas distribution companies are already starting work on their business plans. Assuming Ofgem does roll over the gas distribution price controls to align with electricity distribution, it is vital that these two years are not wasted and that the rollover process is as light touch as it can be. There are lots of hard questions about how to regulate a network that faces real stranding risk, that needs to be kept safe while any customers are still connected and where there is the prospect of a "death spiral" with a declin- ing number of (probably poorer) customers le‚ picking up the bill for the overall network. And then there's the question of how to treat the gas networks if they are repurposed for hydrogen. Waiting on the FSO or on the DESNZ decision on heat before starting these conversations would be wasting time we do not have. Thinking about these real-world challenges now will also help make clear where RIIO works and where it doesn't, which can then inform what the future shape of network regulation should be for gas distribution, rather than trying to answer that question in abstract. This is a di• cult time for energy regulation. We know the industry is going through a transformation and it makes sense that regulation itself may need to be very di• erent as a result. But we have to keep the plane in the air and carry out that re' t mid-— ight. That points to bold but incremental change rather than starting with a blank sheet of paper; keeping what works and changing what doesn't; and, above all, maintaining momentum. How's that for a de' nition of agile regulation? Maxine Frerk is a former senior partner at Ofgem and currently a director at Grid Edge Policy, and a Sustainability First associate O ur customers and partners want to use digital strategies to push the boundaries of energy system transformation to build a data universe that prioritises bene' ts for end users and the environment. Yet, the challenge of building data infrastructure for the whole GB energy system is complex, even for a central body like ElectraLink with relationships across retail, distribution and transmission. While there is a large amount of energy data currently available, e• ective deployment requires deep industry knowledge and a wide grasp of the possibilities of both existing data and collected but as yet unshared data from disparate sources. According to a Which? Consumer Insight Tracker, trust in the energy sector is currently low following high prices and mass supplier exits, and this mistrust o‚ en unfairly impacts suppliers as the customer-facing entities of the market. Improving trust to improve access to end users' data is now an industry-wide priority. The current fragmented data ecosystem makes it di• cult to solve these challenges and work towards these goals in a timeframe that suits innovators. This is compounded by a necessarily complex regulatory landscape, which means that change cannot always happen at the pace required by the fastest moving innovators, technologies and business models. Overall, while there is an absolute need for a whole system improvement of data infrastructure, challenges will always remain at the edge of the system. These challenges need to be nurtured now as a small percentage turn into the whole system challenges of the future. ElectraLink is as a trusted party that can curate datasets from many di• erent public and commercial sources and integrate this data in cohesive formats and structures. Exercising these capabilities and upholding trust in the legal sense – our data trust enshrined in the Data Transfer Services Agreement – is key to accelerating innovators' access to data and proving their business models. By combining our knowledge of energy data with our understanding of regulation and its constraints, and the governance to con' dently work with innovators, ElectraLink's mission is to provide access and insights across a nationwide dataset under our trust. We know the challenge is not easy, but our 25 years of experience in managing retail and network data means we are perfectly placed to provide access and insight and ensure the quality of the data, including the identi' cation and correction of errors or inconsistencies. For more information, email: communications@electralink. co.uk. Or visit: https://www.electralink.co.uk/ EXPERT VIEW PAUL LINNANE, CHIEF DATA OFFICER, ELECTRALINK A decentralised, data-driven energy system is built on trust system is built on trust

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