UK Power Networks has outlined plans to shift its business from a distribution network operator (DNO) to a smarter, integrated distribution system operator (DSO).
The company is consulting on its proposals to become a fully fledged smart grid.
“We are on the verge of a change as significant for electricity as the advent of broadband was for telecommunications,” said Basil Scarsella, CEO UK Power Networks. “Today we’re launching our vision for the smart network, and we want everyone’s views”.
DNOs build, operate and maintain the electricity distribution system. But in recent years, the growth of distributed generation (DG) is creating network constraints. UKPN alone now has 8.5GW of DG connected to its networks, with 3.6GW waiting to connect.
Those constraints are coming to a head, and have an impact at national level. Network operators are therefore trying to create models that allow them to maximise network capacity while feeding into national grid balancing.
The DSO model is the broad term for these smarter distribution networks and will ultimately see network operators become ‘mini’ system operators in their own right.
Smart grid operators will need to intelligently balance their networks to accommodate not just increasing volumes of PV but also electric cars, batteries and smart appliances that are also likely to have to respond to price signals related to network and supply constraints.
While the traditional DNO business of reliably ‘managing the wires’ will not change, the DSO shift brings a whole new layer of customer interaction, management and control. Network operators are therefore planning to invest significant sums building out new business areas and teams.
For businesses, and ultimately households, the advent of the DSO model will also open up new routes to market for flexibility, potentially increasing the value of any ability to adjust consumption or generation. UKPN’s belief is that those DSO markets will not only link in with National Grid’s SO markets, but also those of other DSOs. Eventually, a pan-European flexibility market may be created.
The consultation sets out the DNO’s definition of a DSO, how that transition may take place and the roles it may ultimately assume. UKPN seeks stakeholder views on those ideas.
See the consultation here.
UKPN will outline its work to accommodate greater flexibility and generation and what this means for businesses at The Energyst’s DSR Conference, 7 September, London. See the agenda and request a ticket here.