Guest blog - Barbara Hammond, Low Carbon Hub

As part of our transition to a Distribution System Operator and the recent publication of our Supporting a Smarter Electricity System report, we hosted a stakeholder event in Perth on Monday this week with another event taking place in Oxford this Friday. We asked some of the guests speakers at these events to provide a blog along the themes of the five principles we will adhere to in our transition to a DSO. Barbara Hammond from the Low Carbon Hub has provided the following blog for the following DSO Principle: A DSO should unlock local solutions.

Networks for success

At the Low Carbon Hub, we are very interested in the transition of DNOs to DSOs because we see that this change could support the development of local energy networks with a high level of community-owned infrastructure feeding into them and a high-level of community engagement helping to organise local customers into being both producers and consumers.

There are two absolutely key aspects to the transition for us. The first is about neutral facilitation and access. The second is about the need for networks to be not just about wires, switches, smart technologies and smart information-sharing but also about people and geographies.

Free access, neutral management

We agree with the vision set out in fig 5 of 'Supporting a Smarter Electricity System'. We think 'peer-to-peer flexibility markets' are the way to go, with local, interdependent smart grids trading energy between local customers but being connected to the wider distribution and transmission networks to provide security and resilience at need. We set out this vision in our Community Energy Manifesto www.lowcarbonhub.org/manifesto.

There is, however, some devil in the detail of this vision that we think needs to be tackled now, and does not rely on SSEN alone. We agree that planning standards need to be changed to allow connection based on recorded network flows rather than contracted capacities. But in order for the system to then facilitate the interaction between agents in the system, there is a fundamental need for standard information protocols to be developed. Think of telecoms as an example: whether you use an iPhone, a Samsung or an old Nokia phone; whether the call is to or from a mobile and to or from an old-school fixed line; whether you are in the UK, Germany, US or China; whether the backbone of the network is provided by Ericson or Cisco: everybody "talks" to each other.

The real time information is key and we need standard protocols; this is not just the work of SSEN - this is for the entire electricity system and we think it should be developed in such a way that a GW-scale plant talks to the system in the same way as a 5kW battery or a domestic heat pump.

We question, therefore, whether in this sense the need for an aggregator suggests a market failure. An aggregator is nothing more than an interface translating information from one "language" to another - from domestic or small scale to grid-scale. We think the system can be set up with the right protocols to cut out this potentially costly 'middle man'.

Community Networks for System Resilience

If the trading system is set up to facilitate free access and neutral management, we see that this could aid community-scale local smart grids to develop that would increase the resilience of communities to external shocks, not just from flooding but from energy price shocks and the externalities of climate change.

We see a potentially important role for the DSO in helping the local, community-based smart grids to develop. How will communities and localities develop within the 3.1m SSEN customers in the south of England? To what extent will the 106,000 substations and 85 depots owned by SSEN help to focus and develop 'energy communities' where the people living in the places know and work with their SSEN staff? How could those communities capture some of the cost benefit from increased flexibility of £17-40bn, as calculated by Imperial College?

SSEN is already working on separate innovation projects forming many of the pieces of the jigsaw that might form a local energy smart grid, e.g. projects focusing on:

  • Off gas grid customers with electric storage heating
  • Social housing retrofit programmes
  • Community renewable energy scheme, local balancing as well as visibility of network capacity
  • Customers with plug-in electric vehicles

It has also developed the concept of the Constraint Management Zone where it focuses on places where energy demand management could avoid the need for expensive grid upgrades.

We suggest that, along with trials of technologies and protocols for fast-response balancing and storage to cover intermittency, the knowledge gained from these projects could form the basis for trials of the most local, community-based end of the peer-to-peer flexibility market.

Next steps: four steps to heaven

So, how would the Low Carbon Hub like to work with SSEN in preparing for the transition to DSO? We see the following four steps:

1. Transparent sharing of information. We would like a Regional Dashboard for the southern region, following on from the one developed for the Scottish Region. This would show the issues SSEN is grappling with and the plans it has to solve them. Sharing the pain of these problems openly may mean that stakeholders come up with unexpected solutions to solve them.

2. Transparent engagement. We would like to start building the community networks where knowledge is shared about local constraints and under-utilized assets, so that communities can help to identify and implement the quick wins.

3. Honest conversations about sharing and capturing value. We would like to work with SSEN on modelling and interrogating the 'peer-to-peer flexibility market' concept so that we can help to find and solve the perverse incentives and work out how to share the value of saved reinforcement.

4. Rolling out the successful Network Innovation projects. We would like to explore how the Community Resilience Fund may be used to help repeat and aggregate successful network innovation projects in particular localities, for example:

  1. Making use of existing assets to start trialling flexibility
  2. Electrification of heat in Oxfordshire's off-gas areas
  3. EV charging, Oxford City and the proposed Zero Emission Zone. EV charging in the Park and Rides. Combinations of EV charging, local generation and battery storage.