The current, static nature of DUoS charges fails to address the increasing variability of when periods of peak demand occur e.g. instances of “price herding” around periods of negative wholesale prices that can fall outside of the ‘traditional’ peak demand periods. While explicitly contracted flexibility services can seek to address this through demand turn down/generation turn up services, procuring such services adds cost &complexity to mitigating network constraints. Additionally the totality of the network is not usually considered, with a focus often on either an HV or LV solution. Dynamic network pricing will take the form of a multi-voltage level network price as well as differentiation within the same voltage level, enabling specific assets, such as individual low voltage feeder cables to be priced uniquely based on prevailing conditions. This network level approach will co-ordinate price signals to efficiently mitigate system wide constraints&avoid possible conflicting actions
Benefits
In the recent NESO Clean Power 2030 report, they forecast 11.7GW of demand side flexibility by 2030. With annual despatched volumes of between 10.5 – 31TWh. Based on an assumed average cost of £100/MWh, this could result in annual expenditure of £1 – 3 billion. While the report doesn’t provide a breakdown of this expenditure split between NESO and DSOs, assuming 30% of expenditure is based on DSO expenditure, of which NPg is 15%, this suggests the annual expenditure on flexibility services by NPg in 2030 could be between £47 - £140 million. If dynamic network pricing could be used to totally avoid the requirement for the procurement of explicit flexibility services, this represents the potential annual benefit of this project to NPg. In reality this is unlikely to be achieved but demonstrates the likely ceiling on the monetary value of the benefits.
While this is a large potential benefit it needs to be appreciated that this assumes full take up of the dynamic pricing methodology
For the Shine 2.0 project UKPN produced a cost benefit analysis using standard copper reinforcement at low voltage as their baseline method. At project initiation, they estimated the benefit of the application of the Shift methodology to have an NPV of around £17m over the period to the end of ED3 on the UKPN network area alone.
A second CBA based around the ambition Consumer Transformation scenario from the DFES estimated the UKPN benefit to be £19m.
Learnings
Outcomes
The detailed outcomes of the project are broadly covered in earlier sections of this report so are not repeated here.
At the project outset the Technical Readiness Level (TRL) was assessed at 5, the system components having mainly been tested in a real-world environment, although not in the exact configuration the project proposed. The anticipated final TRL was 8 on the assumption that the system would be ready for transfer to BAU and suitable for pilot introduction across the entire network. A full functional specification would be available and any regulatory barriers to implementation, or to optimisation, will have been identified.
Commercial Readiness Level (CRL) was assessed in a similar manner, starting at 6 in product/solution phase and an ambition at project completion to be at CRL 8, ready for broader market introduction.
The project partners believe that these TRL and CRL levels have been reached and the details included earlier in this report are designed to provide the blueprint for the functional specification that can be adopted by not only Northern Powergrid but other DNOs as well. Furthermore, as part of the project stakeholder engagement, including at the Octopus Energy Flexible Futures event, the learnings of the project were presented to a diverse range of stakeholders across the globe. Many DNOs from other markets expressed an interest in adopting the learning gained from this project, suggesting a broader value than just to GB markets.
Lessons Learnt
The project has highlighted that it is possible to deploy a DNP to deliver a multi-voltage price signal and that it can elicit the desired behaviours from providers. Future projects could go further by testing other technology types such as heat pumps or generation as this trial focused purely on domestic EV chargers.
Under business-as-usual deployment, it may be desirable to measure performance at the boundary point rather than asset level metering as this would consider the net import / export of each premises.
