Issue link: https://fhpublishing.uberflip.com/i/819678
I t has been well reported in the past six-months that the energy system in the UK is undergoing a great deal of change. System regulator Ofgem and the UK government are driving this change in response to evidence presented in 2016 with regards to a greater need for whole system co-ordination, • exibility and visibility. Many of the distribution network operators (DNOs) have made bold statements about what they think the next steps are for the upcoming transition to distribution system operator (DSO). SPEN published its DSO vision in October 2016, and ENW, WPD, UKPN and SSEN have all made similar statements in the press or in association with innovation projects – CLASS, NTVV, NINES and ARC, to name but a few. Time for transition Ofgem has made it clear that it expects DNOs to begin making this transition towards a DSO before the start of the next regulatory period. In order to be able to roll out DSO business models in RIIO-ED2, innovation trials and demonstrations proving these models need to be taking place in the short term to lay the foundations for the transition. This urgency was re• ected in the recent calls for third party NIC ideas, with both SPEN and SSEN highlighting the DSO transition as an area of focus for innovation projects this year. A quick look at the initial screen submissions shows that the message has been received and that DNOs are now responding to Ofgem's call for action. The list of proposed projects ranges from those looking at DSO transition in particular, to others focusing on system • exibility and market potential. The " rst real-world demonstration of Active Network Management (ANM) technology in the UK began in 2008, and now managed connections are becoming a commonplace connection choice o– ered by the DNOs. Wider stakeholders understand that there has been a signi" cant shi— in the DNO business model to accommodate managed connections as part of business- as-usual operations. However, the slow transition could be attributed to the relatively small incentive in place for DNOs to deploy managed connections. Who benefi ts? The key bene" ciary in this case is not the DNO but the developer, who as a result enjoys a cheaper and faster connection to the network. With the current setup in mind, the transition to a DSO could potentially unlock more bene" ts for the DNO, in addition to bene" ts to users of the system. By democratising the energy market, and opening up both new and existing markets to additional participants, it introduces more competition, therefore potentially driving down the cost of system balancing at both distribution and transmission level. The bene" t to the DSO is that there would be new incentives to be accessed, and pro" ts to be made, from running an eš cient market system in a way we would assume to be similar to the current TSO incentives. Step in the right direction Regardless of where the bene" t lies, the DSO transition can be seen as a step in the right direction in terms of improving visibility and • exibility of the whole system. As is o— en the case, the technical enablers needed to implement the DSO model are already available and ready to be deployed. The focus now should be on understanding the commercial and regulatory requirements associated with the DSO transition. NETWORK / 12 / MAY 2017 The technology is ready, now is the time to concentrate on the commercial and regulatory challenges that surround the DNOs' transition into DSOs, according to Laura Kane of Smarter Grid Solutions. A new world order "Wider stakeholders understand that there has been a signifi cant shift in the DNO business model to accommodate managed connections as part of business- as-usual operations." that there has been a signifi cant shift in the DNO business model connections as part of business- INDUSTRY INSIGHT LAURA KANE DSO TRANSITION RIIO-ED2 and the DSO business model are top of the agenda in the Network Theatre at Utility Week Live at Birmingham's NEC from 23-24 May. See utilityweeklive.co.uk DID YOU KNOW