Northern Powergrid will spend £83m digitising and upgrading its network to create a smart grid backbone. Meanwhile the company will be ready to launch a flexibility tender by the end of 2018.
The network operator told The Energyst that the infrastructure upgrade will lay the foundation for its transition to a smart grid, or distribution system operator (DSO).
The ‘Smart Grid Enablers’ project will add communications technology to around 8,000 substations so Northern Powergrid can better monitor and control those assets, with controls upgrades or replacements planned for 1,900 substations over the five-year project.
The upgrades will enable it to manage the grid more intelligently as generation or demand dictates.
Head of trading and innovation, Jim Cardwell, said the project boiled down to three elements: “Visibility, communication and control”.
He said that while the industrial legacy of the North provides more headroom compared to DNOs operating in other geographies, Northern Powergrid wanted to lay smart grid foundations to manage local challenges as they arise.
“This investment is the bedrock and then we can bolt stuff on to this common platform and move quite quickly, so that we are a smart grid enabler, not a blocker.”
He cited electric vehicles as an example.
“Overall we have decent capacity in the North East to soak up charging patterns. But there may be EV charging hotspots, or areas where there is less diversity in charging behaviours, such as commercial fleets aligned to shift patterns compared to residential areas. That is when we might need to control network devices,” said Cardwell.
“So once we get visibility of areas that require interventions, we can do that quite quickly without affecting reliability of supply.”
The firm will spend £83m on the upgrade at a time when DNOs are accused of being allowed to make excess profits. But Cardwell said the alternative network reinforcement approach – installing bigger cables and transformers – could cost more than half a billion pounds by 2031, under high deployment of EVs and electrification of heat.
While heat’s decarbonisation pathway is yet to be determined, Cardwell said building a digitised backbone gives customers a better deal on a more flexible network with greater functionality, “without having to dig up roads”.
Cardwell said Northern Powergrid is eyeing flexibility solutions instead of reinforcing two primary substations.
“We could be coming to market [for flexibility services] later this year,” said Cardwell. “We established a number of years ago this is the direction we will take, so it is just a question of timing; a matter of when, not if.”
“If it is needed, we will be in a position to go to market at the end of this year.”
Easy does it
Cardwell said simplicity would be central to successful flexibility procurement.
“We are looking at a wide range of contracting models but, crucially, we want to make it straightforward in terms of response and recompense. That is our key message. We will make it straightforward and align our proposition so that is not completely bespoke to other network operators,” he said.
“If we can standardise [flexibility procurement] across the networks, we make it more straightforward for everybody.”