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NETWORK / 35 / SEPTEMBER 2016 SYSTEM ARCHITECTURE As a next step therefore, the FPSA team has proposed that an extension of its analysis is required. This should look at the impact that implementation of proposed functionality would have if attempted in the context of today's power system and, as a consequence, identify policy, regulatory, social and commercial dependencies to augment the project's initial sequencing insights. Also, a new phase of analysis should look in greater detail at points where power system evolution butts up against and sometimes merges into other energy vectors. The consequences of inaction There is still essential work to be done before all the moving parts of a whole energy system, both current and future, are fully plotted and interdependencies understood. But equally there is a real need today for government and industry to acknowledge and embrace whole system aspirations and commit themselves to progress. Encouragingly, and despite ongoing political upheaval, representatives from government have said they will use the FPSA project recommendations to inform their thinking on smart systems, the changing role of the system operator, moving towards less interventionist and more market- led regulation, and innovation strategy more generally. However, Simon Harrison, chair of the FPSA project's delivery board, was emphatic as he wrapped up its launch event in July that industry must take a leading and proactive role in effecting change. "We think as a principle that the industry should take as much control of this as it can and that as much is done through markets as possible," he said. "That will unleash the maximum amount of innovation and minimise the amount of intervention from government." He was clear that a failure to do this would have significant negative outcomes, including a lack of direction behind moves to reform the system operator role and uninformed decisions for the next regulatory cycle. With the latter point in particular in mind, Harrison urged industry executives and regulatory leaders act before the next price control – within the next two and half years – to align their thinking with the needs of the future. Without this alignment we risk "locking in a way of working that becomes very difficult to change", and "we will go on to build all sorts of infrastructure which will have no meaning in a transformed world". Becoming more specific about the recommendations that he believes industry can take forward at once and being "realistic" about the limited ability of Whitehall to push forward a major change agenda in the current climate, Harrison called for industry ownership of recommendations two and five. The first calls for a functionality implementation framework. The second involves identifying activity and capability gaps in UK research and development that could prevent the delivery of desired power system functionality. The extent of industry's enthusiasm to answer this call for proactive adoption of the FPSA's change agenda is yet to be made clear. Challenging the status quo and advocating upheaval is not something that is commonly associated with industry incumbents – the network operators. At the same time, a lot of work is needed to fully engage non-traditional stakeholders in energy system transformation – innovative technology firms and entrepreneurs, for example – who might inject a more ambitious and radical approach to change. These parties tend to be put off by all the talk of system planning and regulation in the power sector, and Harrison recognised that the challenge and opportunity of market reform must be better articulated for this audience. The FPSA team took on a tough job. It was challenged to work within some frustrating constraints and to bring together unconventional partners to agree an agenda for ambitious change in a traditionally risk- averse industry. It hasn't quite kicked off a revolution yet, but it has the makings of a plan for one. N The challenge ahead Significant drivers of system stress 9GW solar deployed Multiple parties contracting ad hoc for DSR One million EVs on the road Heat pump load 3GW 60% of capacity is from variable sources Key sector milestones DECC smart energy call ESC mobilising Role of SO? DSO? Clarity required for defending these roles ET2 review discussions commence ED2 review discussions commence Smart metering rolled out 2016 2017 2018 2019 2020 2021 2022 >2030 A gap in Whitehall's smart energy positioning Uncertainty in developing DSO and SO roles Smart meter functionality under-utilised Uninformed basis for ET2 regulatory reset Uninformed basis for ED2 regulatory reset Potential to over-build the networks, stranded assets risk Increasing network congestion and delays for connecting generation and new loads (EVs, HPs, etc) Declining ability to meet consumer expectations, decarbonisation and supply security Fallout from a failure to act