The challenges

The world of electricity is changing and there are a number of significant challenges to the traditional method of distributing energy. These challenges include:

  1. A change in the source of energy is altering the timing and direction of energy flows;
  2. An increasing dissatisfaction with existing market models and the inability of existing systems to allow new disruptive market models like peer-to-peer trading to emerge;
  3. Forecasts of significant load growth as a result of new low carbon technologies;
  4. Increasing conflicts between the technical needs of different elements of the electrical system;
  5. Increasing need to consider the wider system and other energy vectors in operating and developing the electrical network; and
  6. Addressing all the above while meeting the challenges of the energy trilemma.

Extensive trials have been funded nationally and internationally to understand the efficacy of a range of solutions (technical, commercial, regulatory and behavioural) and we now know that we have the key elements to meet these challenges.

However, the key barrier to deploying these solutions at scale is the absence of the markets and platforms necessary to integrate these components into a system – a system in economic, technical, societal and commercial terms. The shift from the traditional DNO model to a DSO model will be crucial to this change.

Open Networks has been endorsed in the UK Government’s recent “Smart Systems and Flexibility Plan”(1). Open Networks has already defined a DSO and the key functions and competencies that a DSO will require.

TRANSITION will explore several models with reference to “price flexibility (occurring when any party varies its demand or generation in response to the price of energy, and network use at a particular time and/or location)”, and “contracted flexibility (where parties trade and directly contract with one another to procure flexibility)” as defined in the “Smart Systems and Flexibility Plan”. There are different actions to achieve prices which reflect the value of the service to the wider system (‘system value pricing’) for different types of flexibility.

One of the key outputs from Open Networks will be a Smart Grid Architectural Model of the key elements of a DSO; this will include the NMF Platform. This Platform will be market agnostic but will provide the information and visibility necessary for a range of markets to operate. To use a very simplistic analogy, the relationship between the DSO and other Market Participants can be considered similar to that between the postal service and online retailers such as Ebay or Amazon.