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NETWORK / 8 / JULY/AUGUST 2017 T he government cannot sit back and leave the power sector to transform itself. That was the underlying message from the second phase of the Future Power System Architecture (FPSA) programme launched towards the end of last month. Describing the latest • ndings, FPSA project delivery board chair Simon Harrison warned there could be dire consequences if ministers failed to act. He noted that the sector is already evolving rapidly, with the emergence of a wide array of new players and technologies. "Without the necessary co-ordination, there is a real risk that these developments will have adverse impacts on the power system, leading to lost whole-system op- portunities and potential incompatibilities in the way that technology is implemented and the way that markets operate. "There is currently no shared vision or even shared understanding of how to bring all the elements together in a way that addresses whole-system issues and is e‚ cient, eƒ ective, secure and reliable," he…added. "All parties, including customer repre- sentatives, now need to come together as a whole to create that vision and, with the catalyst of government, put in place the mechanisms that will make it a reality." The government-sponsored FPSA pro- gramme is developing a blueprint for the delivery of the power system that will be needed by 2030. The ambitious project was commissioned by Innovate UK and is being produced collaboratively by the Institution of Engineering and Technology and the Energy Systems Catapult. Published last year, the • rst chapter outlined 35 distinct functions it will need to ful• l, grouped into eight broad categories. The second chapter has, among other things, identi• ed four main obstacles to delivering those functions: industry govern- ance, the regulatory framework, commercial arrangements and technical challenges. Industry governance According to one of a series of reports produced for the second phase of the FPSA programme, the current code governance process, which involves an array of industry panels recommending modi• cations to Ofgem, "is not su‚ ciently agile or " exible to respond to the degree and pace of future change envisaged". It says the delivery of the 35 functions will require "signi• cant interaction" with technical market codes. The transition of distribution network operators (DNOs) into distribution system operators (DSOs), for example, may require the introduction of a balancing code at the distribution level. Future code changes will need to involve a greater number of stakeholders and con- sider a wider range of factors. "The existing process may not support a system-wide perspective," the report cautions. Codes may have to be repeatedly adapted when the full implications of previous changes become apparent. Regulatory framework The current licensing and regulatory ar- rangements "do not account for new parties and new business models". Local suppli- ers, for instance, can apply for a licence restricted to a certain geographic area but only where they can demonstrate an "over- riding public interest rationale". The regulatory framework also fails to re" ect whole-system thinking. Most obvi- ously, the RIIO price controls for electricity distribution are misaligned with those for transmission and gas distribution. While this does not by itself prevent cross-sector investments, new mechanisms or incentives are needed to bring them forward. The delivery of many system functions will require new players to have access to the growing volume of data produced across the sector, including information about customers. This will introduce risks FUTURE POWER SYSTEM ARCHITECTURE Now The FPSA journey Source: 1 FPSA2 MAIN Synthesis Report Research Development Validation Demonstration Business as usual Government Government with stakeholders Government with sector Sector Delivered through strong sector co-ordination Future Power System Architecture Programme Power Network Joint Vision Problem defi nition 2012-15 FPSA1 Technical gap analysis Reported in July 2016 FPSA2 In-depth analysis and development Reporting June 2017 FPSA3 Specifi cation and validation FPSA5 Demonstration FPSA4 Innovation FPSA6 Transition to business as usual "There is a big transition under way. We know there's a lot of change. But the reality is we do not know where we are heading in the next 10 or 15 years, and therefore we have to, as regulators, policymakers and indeed those running the system, be adaptive and be able to respond to unexpected changes as they come up." JONATHAN BREARLEY, HEAD OF NETWORK REGULATION, OFGEM NETWORK REGULATION, OFGEM