Project Summary

Increasing flexibility is required on energy networks to manage changing demand and generation patterns. This includes reducing power consumption at system peaks (e.g. winter teatimes); and increasing power consumption at certain times to take advantage of renewable energy availability.
Consumers can benefit from providing flexibility, through payment for providing services to the network. However, currenty, access to participation in flexibility markets is likely limited to the most affluent and engaged consumers.
Equiflex aims to promote equal access to the participation in flexibility markets, ensuring no customers are unfairly left behind and enabling a just transition to NetZero.

Innovation Justification

Equiflex's Core Innovations are:

• Developing new flexibility options specifically designed for target groups
• Linkage with LHEESs/LAEPs
• Developing a 'Toolkit' to identify optimal localised flexibility options given network parameters and customer demographics

Previous relevant work includes:

• 'Socially Green' (NIA) - studied customer perspectives on flexibility. Equiflex develops this by increasing customer-network interaction and including other aspects (e.g. LHEESs/LAEPs) affecting customer energy usage.
• 'Transition' (NIC) - trialled various flexibility options, gaining end-to-end understanding of provision, use and settlement of flexibility. Equiflex develops this by considering targeted options for less engaged and more vulnerable customers, and prioritising options based on local network parameters.

Readiness Levels

Individual customers' flexibility use is in its infancy, and integration of distribution-level flexibility is also at an early stage. Extensive increases in system and process automation will likely be needed to fully realise benefits. It is also important to consider system effects, e.g. how flexibility in one area affects wider network performance. LHEESs/LAEPs are at an early stage, so Equiflex provides the first opportunity to consider their network impacts.

During Discovery, we will investigate and document the TRL, IRL and CRL of the proposed flexibility options.

Scale & Appropriateness

SIF is the best funding mechanism for Equiflex, as it allows initial investigation of novel concepts relatively cheaply, with subsequent work and funding subject to a satisfactory case being made at each review stage. An appropriate Discovery Phase is described in this application, but we have also considered project progression through subsequent phases.
The current development level of the project elements means that early-stage R&D in this area is beyond the scope of SPEN's BAU. It requires extensive collaboration between diverse stakeholders to understand interactions between different sectors and develop a mutually beneficial path forward. Equiflex allows early consideration of relevant issues and could unlock efficiencies or investment downstream that could be treated as BAU.

Counterfactuals are:

(1) 'Do nothing' - DNOs simply respond to the market demands for flexibility services and take any benefits provided. The disadvantage of this is that minimal savings will be available, and network upgrades are still likely to be needed as flexibility provision will be piecemeal.

(2) investigate flexibility, but without customer focus. This poses the risk of vulnerable customers being left behind through failure to consider their needs, and potential system synergies being under-exploited.

We therefore conclude that our proposed approach provides the best solution to the stated problem.

Impacts and Benefits

Flexibility becomes increasingly important as electrification of heat and transport progresses, and pressure on network capacity increases.

Whilst there is encouraging use of flexibility options by customers, markets remain in their infancy, and products require further standardisation. Past flexibility approaches focused on network needs, and didn't consider the customer perspective in depth. The "Socially Green" project has begun addressing that gap, investigating vulnerable customers' interactions with the energy transition. Equiflex builds on that, by investigating interactions between network flexibility needs, customer needs, and LHEES/LAEP needs. This whole-systems context will allow for wider access to particiption in flexibility markets. This will likely require development of new products, services and market processes. A key aim of Equiflex is getting early-stage customer engagement and developing an energy flexibility market with equality 'baked in'.

There is limited information available on the financial benefits of flexibility to networks - another gap Equiflex hopes to address. However, recent analysis by Danish manufacturer Danfoss estimates that EU and UK use of demand-side flexibility could save 40MT/y CO2 and €10.5bn/y societal costs by 2030. In the UK's Project LEO, the price paid for flexibility services was £300-1200/MWh.

Benefit Methodology and Metrics

During Discovery, we will develop a detailed methodology for calculating project benefits, referencing industry standards and guidance such as Ofgem's RIIO - ED2 Cost Benefit Analysis Template.

Anticipated metrics are:

• Avoided/deferred network upgrades -- cost saving (£) relative to the counterfactual of reinforcement proceeding as initially planned.
• Customer savings -- projected cost saving per customer (£/y) for the flexibility options utilised versus a counterfactual of them not participating in the flexibility market.
• Carbon savings will be calculated according to the methodology described in the UK Government's "Valuation of greenhouse gas emissions for policy appraisal and evaluation" document.
• New products, services and processes will be described qualitatively initially, with a quantitative analysis anticipated in later phases of the project on the items down-selected from the initial list as worthy of further investigation.

In Discovery, we anticipate reporting initial findings on a rough order of magnitude basis. In later project stages, further information will become available and modelling tools developed to allow a more granular treatment of costs and benefits. Particular customer groups or network segments can be investigated in detail, and different scenarios tested to develop a probabilistic analysis.