The Government and Ofgem aim to support the transition to a secure, safe, low carbon, affordable energy system in the UK. Electricity network companies will have to address significant new challenges as they play their role in the decarbonisation of electricity supply. They will also be involved in the broader developments necessary to deliver the low carbon transition. The electricity networks will have to be developed to efficiently facilitate low carbon developments in generation, supply and consumption, while ensuring security of supply. To meet these challenges, the future system needs to be more integrated and flexible. We will need a smarter network with the capacity to transfer significantly more energy between a diverse range of generators and consumers. In particular, the systems necessary to balance supply and demand will overlap and be integrated with network and demand control technologies. Significantly more system monitoring and intelligent control will be needed to securely manage a much more complex system while meeting the demand for energy with the optimum level of generation and network capacity – in short a smarter network.
Against this background, the level of interest and activity related to the development of smarter electricity networks continues to grow. Department of Energy and Climate Change (DECC) and Ofgem have already taken a lead here with the publication of the Electricity Networks Strategy Group’s (ENSG) Vision and Route Map for Smart Grids. DECC published “Smarter Grids – The Opportunity” in late 2009. The Forum will take ownership of these documents and consider the need for further iterations of them.
Consideration of smarter networks played an important part in the last electricity distribution price control review (DPCR5) that took effect in April 2010. It will play an even larger part in the next electricity distribution price control review which will commence in 2012. In order to properly recognise the importance of network development as a key part of the low carbon transition, we have established the Smart Grids Forum which is focusing on this issue. The Forum will:
• Identify future challenges for electricity networks and system balancing, including current and potential barriers to efficient deployment of smart grids;
• Guide the actions that DECC/Ofgem are taking to address future challenges, remove barriers and aid efficient deployment;
• Identify actions that DECC/Ofgem, the industry or other parties could be taking to facilitate the deployment of smart grids;
• Facilitate the exchange of information and knowledge between key parties, including those outside the energy sector;
• Help all stakeholders better understand future developments in the industry that they need to be preparing for;
• Track smart grid developments and their drivers; and
• Track smart grid initiatives in Europe and elsewhere.
The Forum’s scope is broad – looking at the services and functionalities that networks will be required to offer as we move towards a low carbon energy sector. It will therefore consider the network companies’ challenges and opportunities relating to distributed generation, the electrification of heating and transport and of course the implications of smart metering on demand side management and active network management. It will address commercial and cultural as well as technical changes and the barriers the network companies face in making these changes.
The Forum has now met on a number of occasions and five work streams have been agreed. These are:
- WS1 – Assumptions and scenarios – this work is led by DECC. It will establish the assumptions and scenarios necessary for the network companies to produce business plans that are consistent with DECC’s low carbon transition.
- WS2 – Evaluation Framework – Ofgem is leading this work to develop an evaluation framework that can assess, at high level, alternative network development options. It is intended that the Framework will help inform policy decisions related to smart grids.
- WS3 – Developing Networks for Low Carbon – the DNOs are leading this work to assess the network impacts of the assumptions and scenarios from WS1.
- WS4 – Closing Doors – this work stream brings together stakeholders to identify credible risks to the development of smart grids as a consequence of forthcoming policy decisions which might fail to take full account of the necessary enablers for smart grid development.
- WS5 – Ways of Working – this work stream looks at how the Forum can best pursue its objectives and communicate effectively with stakeholders.
- WS6 - Commercial and Regulatory -this work stream brings together stakeholders to investigate the commercial and regulatory challenges of implementing the smart grid solutions.
Ofgem has now published an open letter consultation inviting feedback on the first stage of the Smart Grids Forum’s work to produce an evaluation framework for smart grids. This is an opportunity for stakeholders to offer comments which will be taken account of in the second stage of this work
The next meeting of the Forum will be in January 2012.