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The Topic: Smart systems UTILITY WEEK | 10TH - 16TH MARCH 2017 | 11 D istribution system operators (DSO) will arguably be the lynchpin of a future smart system, but the industry lacks clarity on what exactly a DSO is in a UK context. This issue emerged as requiring urgent attention in responses to the recent call for evidence from the govern- ment and Ofgem on the transition to a smart and flexible energy system. In the rest of Europe, DSO is the generic term for a company that performs a role equivalent to that of a DNO in the UK, but it does not necessarily mean they are "smart". In the UK, this is integral to its meaning. DSOs will have greater visibility and control of assets on their distribution systems, enabling them to get the most from their existing electrical infrastructure by contracting ser- vices from distributed energy resources. In this way, they can avoid costly network reinforcement and move away from the traditional redundancy-based model of energy systems. The case for the market role of the DSO is well known. Rapidly increasing numbers of connection requests from renewables developers and other low-carbon generation technologies with variable outputs are creating technical challenges for DNOs. There is also expected to be an increase in demand because of the electrification of a portion of the UK's heat needs; increased multi-vector interaction between the energy, transport and waste sectors; and a need to allow incentives to emerge to enable customers to save money through active participation. This means DNOs can no longer remain passive when it comes to managing the energy flows on their systems. However, opinion is divided over who is best placed to control the system. Should a central independent system operator have ultimate control? Or will DSOs, with enhanced visibility over the continually increas- ing amount of distributed generation attached to their distribution assets, be in a better position to balance the system and use services such as demand-side response and storage? It cannot be both. Flexible methods of connection are being introduced by all DNOs, but it is possible that these active network management schemes will contradict actions undertaken by system operators through bilat- eral agreements with system users. In the absence of policy, network operators are taking it upon themselves to map out the intended path. Last year, SP Energy Networks revealed that it plans to tran- sition towards the "Total DSO" model, in which it will manage all distributed resources on the distribution net- work, responding to instructions from the system opera- tor and managing its resources accordingly. This solution would not be without its challenges. Regulation will be required to standardise the approach among DSOs to ensure a fair market, and the necessary changes to existing commercial and regulatory frame- works would be the most extensive of all the options. DISTRIBUTION SYSTEM OPERATORS Everyone agrees that DSOs in some form will be key to the future energy grid, but there is debate about exactly what this role will be. W ith electricity distribution network operators (DNOs) keen to become distribution system operators (DSOs), Wales & West Utilities (WWU) who, in practice, already plays that role as the gas distribution network for Wales and the southwest of England, thinks that distribution system operators in gas and electricity – and close collaboration between them – are essential to deliver the integrated energy system needed to deliver for energy consumers in the future. At peak times, more than 80 per cent of heat and power demand is met by the gas network. As a business we want to see that con- tinue – and we think it is essential it does, so that as an industry we can meet the energy trilemma to deliver affordable, secure and sustainable energy to customers while also delivering on our carbon reduction commitments. Our belief in gas is not based on assumptions or wishful think- ing on our behalf. Working with leading consultants, we've built an energy simulator – unique among gas and electricity networks – that models future energy supply and demand in an integrated energy network. It also calculates the need for energy storage or interconnection requirements, depending on the future energy pathway that is chosen. The conclusions are clear: whether delivering energy in the form of gas direct to boilers and cookers in homes across the nation, or as a fuel for power stations (be they baseload or peaking plants to enable widespread use of renewables) and therefore serving as an energy battery, an integrated energy network, with gas and electric- ity system operators collaborating closely, is essential to deliver for energy consumers. We're working together with Western Power Distribution on Project Freedom, which could pave the way for a hybrid heating system that could meet a home's energy needs by switching between an air source heat pump, a boiler powered by mains gas, and an electricity connection – depending on what was most cost-effective at the time. If this sort of solution was to be rolled out around the UK, it would further increase the need for a collaborative approach to system operation. With distributed electricity generation entering the electricity grid across the country and green gases being injected into the gas network in an equally distributed manner, it is clear that the traditional, top down system operator and distribution operator relationship has changed in both sectors for good. It's equally clear that gas – whether that's green gas, biomethane, BioSNG, or a hydrogen blend, is going to play a central role in not only electric- ity generation, but also in continuing to deliver affordable, secure and sustainable heat to homes for many years to come – and as a key enabler in meeting our decarbonisation targets by supporting renewable energy generation. So DNOs becoming quasi-system operators like we are is a wel- come step, and a key enabler to further collaboration, so together we can deliver what energy customers right across the country need and expect – energy that is affordable, secure and sustainable. "Gas will continue to play a key role in delivering affordable, reliable green energy in the UK." Comment: Chris Clarke, director of asset management, HS&E, Wales & West Utilities