Through our distribution system operator reforms, we are clarifying the role of distribution network operators (DNOs) in contestable markets and ensuring DNOs neutrally procure grid operational services and facilitate the development of – and coordination between – flexibility markets. As part of these reforms, we need to make decisions about what activities DNOs are allowed to do – and under what regulatory treatment.
Previously, in February 2020, we consulted on the regulatory treatment of Customer Load Active System Service (CLASS) as a balancing service in the RIIO-ED2 network price control. Responses were extensive and highly varied, with a number of stakeholders expressing doubts over our minded-to position and/or requesting further analysis of the options under consideration. For these reasons, we have elected to consult again on the regulatory treatment of CLASS as a balancing service and have produced a supporting Impact Assessment, which should be read in conjunction with the consultation document, to provide a detailed assessment of the costs, benefits and wider impacts.
In this new consultation, we again set out and invite views on our minded-to position for the regulatory treatment in RIIO-ED2 of DNOs providing network voltage control and network management services, via the remote management of deployed network assets, to the electricity system operator for its balancing services activity. We explain the options we have considered and the analysis that has informed our initial view.
Responses to this consultation can be submitted to flexibility@ofgem.gov.uk. The deadline for responses is 18 May 2022.