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NETWORK / 15 / SEPTEMBER 2017 network for new windfarms or solar arrays. Power electronics and data The role of the DSO is likely to be an ever more active one in this context, both in interfacing with distributed generation and storage at the macro and micro level, and in having greater links and more transparency with customers. Asset management will also have to evolve to encompass new types of systems and technologies. There are enor- mous numbers of well-understood assets on the network – such as overhead lines, underground cables, substation switchgear and transformers – but the smart grid will bring in systems that are not as familiar to the networks, such as new types of power electronics, data systems, and intelligence, Scott suggests. "There is a whole industry opening up in terms of power electronics in- terfaces, which are AC-DC devices," he says. Some of these new types of power elec- tronics will be owned by the network com- panies, and some will be on the customer side. "If you go into areas where power electronics have been used for a long time – such as variable speed drives in manufac- turing, for example – they are well under- stood. That's not the case for new power electronics for the networks." For example, new types of sensors may be required to monitor the health of power electronics as- sets. The data they collect must be analysed e‚ ectively, and networks must ensure it is reliable. "Are the sensors giving you a reliable data feed about the voltage on the network, or the ƒ ow on the line?" asks Scott. "And how will they respond to a surge of voltage when there is a lightning strike nearby? All of these things impact on the real world of power networks. It's not a laboratory bench situation, where it is all controlled." Fur- ther, the data from the sensors must be col- lected. "If we are starting to produce a lot of data, where it is going to go, how will it be stored, and who will require access to it?" Communications interfaces between di‚ erent systems on the network will be needed that do not currently exist. "There are fundamental questions about commu- nication structures, data architectures and, indeed, data protocols that need to be an- swered. Otherwise we run the risk of being locked into a world where devices cannot talk to each other, systems are not scalable, and security is hit and miss." These issues should be addressed in the next round of RIIO, Scott believes. "All these issues, in my view, are part of asset manage- ment, and should really come in under the next round – RIIO2 spans the period that will see the arrival of transformative changes. "Are the sensors giving you a reliable data feed about the voltage on the network, or the fl ow on the line? And how will they respond to a surge of voltage when there is a lightning strike nearby? JOHN SCOTT, DIRECTOR, CHILTERN POWER RIIO-2 means more innovation Innovation will continue to play a key role in developing new systems and technologies under RIIO-2, says Denise Massey, managing director of the Energy Innovation Centre. She argues that, for the networks, the introduction of the RIIO controls has "driven networks to be more customer-centric in their approach, and genuinely fueled progress in terms of funding a culture of innovation". In fact, she believes, RIIO has "put the UK energy market ahead of the curve". Massey points to a study by McKinsey that suggests that while corporate leaders believe innovation is in their top three priorities, only 22% had methods for monitoring and measuring innovation. All the networks in the UK now have measures in place for this. "What RIIO has done is to bring innovation to the fore," she says. Objectives for RIIO-2 O fgem published details of its objectives for RIIO-2 in an open letter to networks in July. Ofgem says its "overarching objective" for RIIO-2 refl ects lessons learnt from RIIO-1, as well as "the need to ensure a framework capable of adapting to the wider range of plausible energy system futures". The main objective is that RIIO-2 delivers value for money services for consumers, says Ofgem. The regulator adds it will aim to achieve this objective by giving consumers a stronger voice in setting outputs, and shap- ing and assessing business plans. Ofgem intends to: ● Allow regulated companies to earn returns that are fair and represent good value for consumers, properly refl ecting the risks faced in these businesses and prevailing fi nancial market conditions ● Incentivise companies to drive consumer value by shaping or proactively respond- ing to changes in how networks are used and services are delivered ● Use the regulatory framework, or competition where appropriate, to drive innovation and effi ciency ● And simplify price controls by focusing on items of greatest value to consumers. "Under RIIO-2, network companies will be encouraged to further understand the services that consumers want and need at the start and throughout the price control, anticipating and adjusting to changing demands," Ofgem says. These include continuing to deliver a reli- able, safe and secure system that supports the transition to a low-carbon future. In addition, in recognition that the energy system is evolving, network companies should use fl exible, non- traditional options where appropriate. These include such measures as the purchase of fl exibility services, such as storage or demand- side response services, to manage network constraints.