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UTILITY Week 4th August 2017

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26 | 4TH - 10TH AUGUST 2017 | UTILITY WEEK Operations & Assets Analysis T he government and Ofgem have pub- lished their greatly anticipated smart systems and flexibility plan. As part of the plan, Ofgem has ruled out network- owned storage, but the Energy Networks Association (ENA) insists that the discussion is far from over. The publication of the wide-ranging smart systems plan follows a call for evi- dence, which closed in January aer attract- ing more than 250 responses. The document, published jointly by Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS), out- lines 29 changes and actions that govern- ment and the regulator will make to ensure a "smarter, more flexible energy system" is delivered in the UK. An ambition which could deliver consumer benefits worth as much as £40 billion by 2050, according to a government commissioned study carried out by the Committee on Climate Change. These actions cover three key areas: • Removing barriers to smart technologies. • Enabling smart homes and businesses. • Making markets work flexibly. Energy storage is a prominent issue across all three areas and the joint report reflects a keenness on the part of Ofgem and BEIS to remove "undue policy and regula- tory barriers" to its deployment. The plan was released on the same day as government announced a £246 million investment plan to support battery technology development in the UK. One of the key ways in which energy storage can contribute to smart and flexible energy interests is by helping energy net- works balance the system while volumes of decentralised energy resources increase and demand patterns change. The Ofgem-BEIS report acknowledges this, saying that storage can be used by net- work operators "in a number of different ways". However, the report is equally firm that network companies themselves should not be the owners and operators of storage. It states that this could "impede the develop- ment of a competitive market for storage and flexibility services". In addition to blocking future direct own- ership of storage by distribution network operators (DNOs), new reporting require- ments will also therefore be introduced for networks that already run storage assets. Ofgem associate partner for energy sys- tems Andy Burgess tells Utility Week: "We send a clear message that we don't want [net- work companies] to own or operate storage because we don't think they can be impartial if they own one of the solutions. "As the distribution networks understand the need to look at flexibility and the need to look at more market-based solutions, we think we'll increasingly get a number of cases where there is a need to decide where the dividing line is between the monopoly and the market," he continues. "We very much welcome the monopolies procuring services from the market, but we don't want them to be competitive in those markets." Former Npower chief executive Paul Mas- sara supports Ofgem's view. "It is far better that they [DNOs] tender for storage services and thereby create a transparent and liquid market," he tells Utility Week. It's not over 'til it's over… The ENA thinks differently and insists that further discussion is needed. The associa- tion says its members support flexibility, including storage, being procured from the competitive marketplace as a commercial service. But the "key question", the group argues, is one of accessibility. The ENA says there are likely to be cir- cumstances where the market "does not provide storage services in the right places that networks need it or at the lowest cost to customers". "In that case it may be best for the network to own and operate storage," they say. ENA director of policy Tony Glover tells Utility Week there is a need for "a lot more discussion" and clarity on the issue of stor- age ownership. "I see this more as an invi- tation to discuss than an absolute blanket prohibition. Therefore, although it is in the document, I think [there is a need for ] more clarification and discussion about what Storage wars DNOs are determined to fight back against the veto on them owning or operating storage. Lois Vallely reports. " " "We are on the verge of a change as significant for electricity as the advent of broadband was for telecommunications." BASIL SCARSELLA, CHIEF EXECUTIVE, UKPN "Collaboration is key and our energy networks are ready, willing and able to deliver this vision." DAVID SMITH, CHIEF EXECUTIVE, ENERGY NETWORKS ASSOCIATION "The review of network charging is critically important. We need a rigorous review to ensure that local generators and flexibility providers are fairly compensated for the value they provide." TIM ROTHERAY, DIRECTOR, ADE "[The] report provides clear direction on how we move to a secure, low carbon, flexible energy system, using efficiency and innovation to help keep costs down for bill payers." PHIL SHEPPARD, DIRECTOR OF OPERATIONS, NATIONAL GRID "To deliver the low- carbon economy of the future we have to embrace a new, smart energy system and battery technology will be at the heart of that." JULIET DAVENPORT, CHIEF EXECUTIVE, GOOD ENERGY "The UK electricity market has passed a tipping point and we welcome this timely announcement." DOROTHY THOMPSON, CHIEF EXECUTIVE, DRAX GROUP

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