The end consumer, Distribution Network Operators (DNOs) and Distributed Energy Resources (DERs) are becoming active participants in providing increasing levels of flexibility to the Great Britain (GB) electricity system but there is uncertainty in relation to the roles and responsibilities of the ESO and DSOs in this new smart energy world. This project aims to address those gaps and has the potential to deliver whole systems benefits by creating new flexibility market opportunities for potential service providers.
Deliverables of the project will include reports on national and international trends, a techno-economic feasibility assessment of the developed ESO/DSO coordination schemes at operational timescales, an impact assessment of the ESO/DSO coordination schemes and a roadmap for the physical deployment of the preferred ESO/DSO coordination scheme.
Benefits
The energy system is rapidly changing with end consumers, DNO’s and DERs becoming active participants in providing flexibility across the GB electricity system. This project has the potential to deliver whole systems benefits by creating new flexibility market opportunities for potential service providers.
Enabling efficient access to DERs through streamlined ESO/DSO coordination will deliver:
- Opportunities for customers to realise value from services and new technology
- More sustainable energy markets and networks
- Reduced costs to consumers through more optimised use of services
- Enhanced security of supply
- Transition to net zero at the lowest overall cost for customers
Learnings
Outcomes
The following milestones/outcomes have been achieved:
- Enhanced the current whole electricity system model to represent the developed ESO/DSO coordination schemes at operational timescales
- Defined whole electricity system use cases against which to assess the coordination schemes. These will consider particular geographic locations of the networks, specific types of flexibility services, different technology types of flexibility services, etc.
- Modelling and analyses of Scheme 1
- Modelling and analyses of Scheme 2
- There is a developed roadmap which outlines the physical deployment of the preferred ESO/DSO coordination schemes.
- Gap analysis between as-is and Scheme 1, and between Scheme 1 and 2
- Three stakeholder workshops
- Five reports (including Workstream 5 report, to be delivered until the end of July 2024).
The following conclusions can be taken from the project:
- A range of ESO-DSO coordination schemes and innovation projects in the UK and EU highlight a range of critical needs for efficient flexibility markets and access to DERs: automation of operator interfaces and accurate forecasting, an effective market architecture that facilitates greater E(T)SO-DSO coordination in operational timescales and integrated planning to manage the future system complexity and facilitate integration of DERs.
- Stakeholder engagement revealed that both suppliers and DNOs recognise that whole system solutions should deliver the best value for the end consumer and that the lack of visibility of DERs is a primary challenge. Energy suppliers do not consider primacy rules as sufficient and favour structural change to mitigate conflicts of interest. DNOs’ view is that they already have the best functions for delivering local flexibility recognising challenges with case-by-case rulings.
- The impact assessment showed clear long-term benefits and stronger scores for Scheme 2 (Distributed Flexibility Coordinator), which provides an overall energy network with greater capacity and resilience than Scheme 1. Several suboptimality conditions in Scheme 1 (Enhanced Coordination) that may increase the system cost up to £4.28bn/year have been identified. In both schemes, optimal whole energy system planning and coordination are essential.
- Implementation costs of both schemes are marginal (~1%) in comparison against total savings in system costs against business as usual. Although, there are multiple concerns over the potential complexity of the Scheme 2 implementation, given the creation of a new entity and further definition of roles and boundaries between energy system actors.
- The gap analysis and roadmap creation revealed significant risks in areas such as coordination in the development and implementation of flexibility products, implementation of coordination schemes across multiple industry players, asset visibility and data exchanges.
Lessons Learnt
Some key learning points to date are:
- This is a complex area and to that end clarity at the start of the project can be challenging
- Having capable partners that can adapt to changing priorities or views is extremely helpful when trying to establish projects like this. During Workstream 2 and 3, ICCL considered the request from NGESO and NGED to create a sensitivity in IWES to consider two system evolution pathways (full electrification and hydrogen). WSP has considered the latest policy changes after Ofgem’s consultation, The Future of Distribution Flexibility, which brought significant factors influencing the ESO-DSO Coordination space.
- Business engagement is vital and continuity in personnel throughout helps in that regard. WSP and ICCL focused on stakeholder engagement throughout the project and proposed a 3rd workshop with a wide range of industry stakeholders.
- The IWES model has proved during this initial phase to be extremely adaptable to changing industry dynamics and produced some interesting results when broken down across GB into geographical areas
- The project would benefit from a shorter timescale of implementation, given the complexity and frequent policy changes that influence the ESO-DSO Coordination topic.
