Project Summary
SIF Innovation Challenge 3: Improving energy system resilience and robustness invites applications that look at strengthening whole system resilience and robustness to achieve Net Zero securely.
Unprecedented growth in LCT connections such as Photovoltaic solar panels (PVs), Heat Pumps (HP) and Electric Vehicles (EVs), is triggering network constraints that may continue to increase as the uptake of LCTs gathers speed. Not being able to connect this demand quickly could delay the transition to Net Zero.
Theme: Accelerating the uptake of LCTs at residential level, both in new large housing or in large scale retrofits where network constraints would otherwise prevent connection
Scope: This project will develop technical, regulatory and commercial models to enable implementation of connections solutions for dynamically managed demand schemes, that can connect increasing LCT demands in constrained areas within network limits, without compromising customer needs.
The project will define technical requirements and specification for real time load management systems and explore the role of flexibility management platforms available today to control end point devices, such as EV chargers , HP and Solar PV.
The project will focus on developing a scalable, integrated approach by combining residential flexibility with automated control to manage constraints locally. The project will also explore potential for new products and services such as LV resilience and peer-to-peer trading behind network constraints.
Experience and Capability of Project Partners:
SSEN-D: as project Lead, SSEN-D bring extensive network knowledge and experience in network planning, connections and power flow analysis that will help to define the rules for site identification and implementation of the solution.
E.ON: acting as a technology supplier, will bring their Dynamix product, one of the potential technical solutions that can enable dynamic connections. They also bring experience in gathering consumer insights and developing and delivering energy efficiency solutions.
Baringa: bring an extensive track record of working on regulated energy market projects, experience of conducting economic analysis and calculating Social Return on Investment (SROI). They have extensive experience in innovation trials and Business as Usual (BAU) deployment of new connections products and solutions.
UKPN: while not a project partner, UKPN will provide objective oversight of the project and challenge assumptions, along with the experience of addressing similar challenges to ensure this project has relevance for all DNOs.
Who this will benefit: Housing developers, local governments and housing associations will benefit from quicker speed of connection, customers will benefit from reduced energy bills.
Innovation Justification
Problem:
In some areas of our Southern Electric Power Distribution (SEPD) network the rising demand for customer connections is exceeding the rate at which the capacity of the network can be increased, resulting in significant delays to connection for customers, both new developments and retrofitting LCTs to existing buildings, while waiting for long lead time network upgrades to be delivered.
Why it is Innovative
The Project explores the commercial/market models and regulatory frameworks required to support the adoption of new dynamic demand management schemes that can enable the connection of residential developments more quickly in constrained areas of the network. Such connections products would be a market first for residential customers in GB and would be instrumental in accelerating decarbonisation of households.
Knowledge Gaps:
Flexible connections have been used extensively in RIIO-ED1 for large connections, primarily to manage generation constraints, but the approach has not yet been explored for demand constraints.
While the technology has been proven in managing generation constraints, its installation at scale and across a variety of end point demand devices at residential level has not been tested. This Project will also define the roles and responsibilities of the participants to allow widespread adoption of this approach. The Project also aims to understand the longer-term optimisation of the assets to avoid stranding or to facilitate participation in different markets.
Work is also required to ensure that the regulatory framework does not act as a barrier to the deployment of this solution. In particular, this Project will explore the application of current roles for firm and non-firm connection definitions.
Value of the solution
The value of being able to connect low carbon homes, in advance of network reinforcement, will be measured against the carbon output that would otherwise be incurred, as well as the societal benefits from new housing and LCT usage. The Project will also explore the use of this solution as a tool for resilience, avoiding costs of network outages. This can also accelerate participation in flexibility markets for homeowners, creating additional financial benefits.
Why is this not Business-As-Usual?
The integration of these real time demand management solutions for domestic users within the GB marketplace has never been done at scale and an enduring business model has never been developed. There is lack of clarity on the value chain, business and commercial models and role that each participant would play.
Project Benefits
Dynamic connections solutions will help accelerate domestic LCT connections, allowing DNOs to meet their licence obligations to facilitate Net Zero and will deliver wider socio-economic benefits such as
Increased job opportunities by improving the demand for installation services and facilitating new business;
Reduced demand for health services in SSEN’s areas by improving air quality delivered through decarbonisation of heat and transport.
From SIF point of view, the project can deliver the following benefits.
Financial - Cost savings per annum on energy bills for consumers
As heat pumps are c. 30% cheaper to run compared to gas boilers, enabling installation of heat pumps at scale would help lower energy bills for customers. Deferring network reinforcement will lower associated DUoS charges over longer term.
KPIs to measure benefits:
Number of HP connections facilitated by the Dynamic Networks solution.
Average heating cost/KWh/ customer with heat pump compared to a boiler within a building archetype
Projected DUoS reduction for domestic customers.
Environmental - carbon reduction – indirect CO2 savings per annum against a business-as-usual counterfactual
Improving the speed of LCT connections will enable more customers to decarbonize their transport and heating needs earlier, leading to indirect CO2 savings.
KPIs to measure benefits:
Number of heat pumps and EVs (number of households) in SSEN-D’s area compared to DFES assumptions
Revenues - creation of new revenue streams
Dynamic connections agreements will be a lower cost alternative to firm connections at domestic level and will provide connectees with access to new revenues through rewards during curtailment events.
KPIs to measure benefits
Total amount of curtailment rewards given to customers in a period
Number of customers benefiting from curtailment rewards
New to market - products, processes, and services
In addition to the primary benefits listed above, the project will deliver several secondary benefits. This may include connections advisory services from DNO to promote dynamic connections, new resilience and peer-to-peer trading products, which will enhance revenue opportunities for connectees
KPIs to measure benefits:
Number of DNO services and incentives available to residential customers
Number of residential customers participating in LV flexibility services
Indicative quantitative benefits
Dynamic connections can save c. 14% of planned LV reinforcement spend when deployed at scale, assuming results are similar to those at HV level and above using Flexible connections products. SSEN saved c.£60m in deferred reinforcement on an agreed baseline reinforcement expenditure of £437m in RIIO-ED1, can be achieved at LV level.
