Keeping the lights on
Network speaks to Sotiris Georgiopoulos, head of smart grid development, UK Power Networks.
3rd November 2017 by Networks
Q: You presented at the Network Flexible Networks and DSR conference at the beginning of the month. What message did you want to convey to delegates?
Sotiris Georgiopoulos: I spoke about our flexibility tender and our initiative to engage with customers, providers and aggregators.
Whilst we continue to operate and invest in the network to maintain a safe, secure, and sustainable power supply to eight million homes and businesses, we need to make use of smart, flexible, and innovative techniques to ensure delivery of our outputs, minimise the cost impact on consumers, and manage the increased complexity of this low carbon world.
We believe that customer flexibility will be central to facilitating a smarter, flexible energy system. Our flexibility programme is looking to utilise response from generators, demand side providers, and electricity storage resources connected to our networks to support efficient network planning and operations.
We identified 10 locations where we know that over the coming years, we might need additional capacity in the system to manage the peaks. Instead of the standard, traditional approach of upgrading the assets at those locations, we want to see what the market can offer in terms of flexibility.
Q: This would include demand side response (DSR)?
SG: Yes. It could be provided by existing DSR customers, who are managing their installations to reduce demand, and it could also be offered by batteries, third parties in local communities or generators. We have advertised our requirements in an open and agnostic manner – we don’t have a proscribed view of how it should be provided, as long as it can meet our requirements. We set out the time band we need DSR for, and the amount of capacity we need, and then there is a number of ways that could take place. We made our expression of interest available publicly and we are interested to hear from customers who have flexibility in those postcodes.
Q: What do those hotspots have in common?
SG: They are all forecasted to require peak demand management to keep them within existing network limits. The hotspots are areas where we need to intervene to upgrade the assets. But we want to look at what the market can offer as well. At the end of the day, we have to choose the most economical solution. We will see what the market is offering compared to the cost of upgrading the assets. One of our duties is to build a more efficient network – we will go for what is the lowest cost for consumers. Don’t forget that the main objectives of the smart grid is to keep bills down. It is not smart technologies for the sake of it. The idea is that through the market, through the aggregators, through the DSR companies, and through the communities we find a cheaper way of managing the peaks in those locations.
Q: That’s obviously what Ofgem’s focus is, and will be even more so in the next round of RIIO.
SG: Yes. RIIO is already supporting us to deliver smart benefits. Our record of delivering £120 million of savings using smart alternatives in the first two years of RIIO is a testament to this. I hope that RIIO2 will build on and strengthen the existing framework to reflect the wider system benefits DSOs can deliver in enabling the emerging smarter, flexible energy system.
Q: Are you impressed with the level of innovation in the marketplace, and the potential services that are available to the networks?
SG: The response we have had is encouraging. I am really looking forward to providers coming forward with solutions. Of course, there is more we can do. We will continue working over the next year to lower the barriers to participation in tenders such as this one and bring as many participants as we can forward – whether it is communities, aggregators or our direct customers. The idea is to keep developing the process. We want to move away from the standard network tendering process and make these transactions part of an online marketplace. We are working on this now – it will come to the fore next year. This work is driven by lowering the barriers for participation, and making information transparent and accessible.
Q: An online marketplace would be one of the technologies enabling the smart grid?
SG: Yes. That would be one of the key technologies.
Q: What are the key challenges posed by development of the smart grid?
SG: The smart grid is all about opportunities. It is an enabler for all customers to participate either directly or indirectly through technology and automation in more efficient management of the energy system. One of the key outcomes is to keep their bills down. The smart grid is a series of technical and commercial solutions, but the most important thing to remember is that you are selling a service to customers and trying to meet their needs. If you take a step back and look at what UK Power Networks does, we keep the lights on, and we aim to offer the most reliable, safe electricity service we can to our customers. In a world in which technology is changing very rapidly and where distributed generation is now more common, we need a series of tools that allow you to exploit that opportunity. Between 2010 – 2015 we saw a solar boom. In July 2015, we had the first application for connection of battery storage. Since then, we have had over 1,000 formal enquiries (over 18GW of capacity) for connection of storage. And we see electric vehicles at the forefront of everyone’s mind. In addition to all of this we have the introduction of domestic batteries in the home, and the smart meter roll-out. There is a lot of technology and different business models coming to the market. We want to bring these things together for the benefit of all our customers. The key thing is to enable opportunities, keep the lights on and keep the bills down too.
Q: The opportunity for the consumer seems clear. But as a network, how do you see opportunities for your own operation thanks to the smart grid? Could it streamline your operations, for example?
SG: One of our areas of operation where we are deploying smart grid solution is customer connections. Since 2012, we have been developing innovation to offer cheaper and faster connections which is now offered as business as usual. It is a smart software-hardware solution coupled with a commercial concept that allows customers to connect to the grid without the need for excessive upgrades. Our Flexible Distributed Generation project has now connected more than 100MW in this manner and has saved customers £70m in connection costs. We’ve also connected electric bus depots in south London using a variation of that technology, which allows the bus operator to charge electric buses at times of low load.
Q: Are your surprised by the speed at which the energy system is changing?
SG: No. I am not surprised at all. We are the forefront of this change, so we follow developments closely. We horizon scan and talk to all the relevant stakeholders. We are aiming to be proactive in facilitating the change, rather than reactive. The pace of change is unprecedented, when you compare it to say, when I joined UK Power Networks in 2005, but we are organised to manage this in a practical manner, whether it’s through leading indicators, monitoring of trends, or monitoring of data flows on the network that indicate emerging issues. We also have good links to international utilities that have experience in different parts of the world.
The Australians, for example, have been at the forefront of the take-up of domestic solar, so we have a regular dialogue to understand how their networks and the regulatory frameworks for customers are evolving. We keep in touch with New York, because there are a lot of interesting developments there. We also talk to Californian utilities. This is a global phenomenon.
I would say the UK is at the forefront, but there is a lot we can learn globally.
The other thing to note about the pace of change is that it has made the energy industry a very exciting place and attractive place to work. It is a dynamic environment. That’s good, because we need good people to make the transition to the smart grid, and deliver.
Q: How will connections be enabled for future customers who connect to the network?
SG: They will be flexible, digital connections. This is fast becoming the standard way of connecting to the network.
Q: What is special about that method?
SG: It is not a passive relationship between the customers and the DNO anymore. The customer can participate in markets that enable them to support the network’s needs. The 8.5GW of connected distributed generation we currently have, can play a significant part in supporting the grid – and reducing the need for reinforcement, saving money for those who are connecting, but for the wider customer base as well.
Q: On the generation side, what do you expect the predominant technologies to be that you are connecting to the network?
SG: We will work with all technologies; whatever markets and economics dictate are the right mix of technologies, we will be prepared to facilitate them. Renewables and gas are playing a big role currently at distribution level. Of course, coupling storage with generation technologies is a game-changer. That was one of the reasons we were an early mover on storage having developed Britain’s first large-scale electricity storage facility in 2012. We have helped inform both our internal strategies and national policy on electricity storage as a result.
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