Open Networks Workstream 1 (T-D Processes)

Transcription

1 The Voice of the Networks Open Networks Workstream 1 (T-D Processes) Product 5: Whole System FES December 2018 Energy Networks Association Document Ref: WS1P5DEC Restriction: Published 0

2 Document Control Version Issue Date Author Comments V0.9 Nov 2018 ENA Working draft V Nov 2018 ENA Further draft for Workstream 1 review V Dec 2018 ENA Draft including draft section 6 V0.11a 04 Dec 2018 ENA Further edits of main sections including those discussed on 30 th November meeting. V Dec 2018 ENA Near final draft provided for Workstream 1 review. V Dec 2018 ENA Final draft including Workstream 1 feedback. 1

3 Contents Document Control... 1 Contents Summary Introduction and Purpose Scope... 8 Product 5.1 Review Current Forecasting Approaches (part i. from PID)... 8 Product 5.2 Whole System FES Framework Development (part ii. from PID)... 8 Product 5.3 Process for T&D FES Coordination (part iii. from PID)... 8 Further work Sub-Product 5.1 Review Current Forecasting Approaches Methodology Forecasting Questionnaire Review of DNO Responses Observations General The need for a whole system forecasting framework Forecasting horizon and uncertainty Forecast parameters Diversity Source of forecasting data Collaboration Sub-Product 5.2 Whole System FES Framework Development Principles and Objectives Framework Options Options Assessment Preferred Option Building Blocks The Benefits of a Common Language Scenario Building The Scenarios in Detail Collaboration Interaction with Industry Processes Regional Differences Data Exchange Formats Stakeholder Engagement Communication of the FES Whole System FES Framework Review Transitional Arrangements Sub-Product 5.3 Process for T/D FES Coordination Introduction Timeline for GB FES Timeline for Network Company Forecasting and Data Exchange Processes

4 6.4 Key Areas for T-D Co-ordination on GB FES Publication of GB FES and Distribution Level FES s Stakeholder Feedback Introduction Whole System FES Workshop Presentation to ON Advisory Group Industry Webinar Conclusions & Proposals Network Operator Approaches to Forecasting Whole System Framework Development Process for T&D FES Co-ordination Implementation Plan Appendix 1 Summary of forecasting questionnaire responses Appendix 2 Generic templates for scenario data outputs

5 1. Summary The Whole System Future Energy Scenarios (FES) product of the Open Networks Project s Phase 2 plan for Workstream 1 (T D Processes) seeks to establish a framework to facilitate improved whole system scenarios to support whole system planning activities. It would do this through: more structured input from network companies (DNOs and TOs) to the GB FES produced by the GB System Operator (SO), and the production of distribution level FES which are aligned to the GB FES. The work for this product has been carried out by a team comprising representatives from each of the electricity network companies. At this stage, the work is focussed on electricity networks and ensuring that there is a consistent approach to FES across transmission and distribution networks. Further work will be needed if the whole system approaches are to be better aligned across other energy vectors. This work is intended to ensure that the future scenarios used to support industry processes are produced consistently and are aligned across network operators. It will support the production and publication of scenarios to be used by network operators and stakeholders. This work is closely linked to other Open Network products including Workstream 1, Product 1 Investment Processes, Product 6 Regional Service Requirements and Product 12 SO/DSO & DER Data Requirements. The Whole System FES product is made up of three sub-products and associated deliverables: (i) P5.1 Review current forecasting approaches (January to June 2018); (ii) (iii) P5.2 Develop and agree guidelines/common framework to produce distribution style FES on a priority basis (April to September 2018); and P5.3 Establish process for FES coordination across Transmission and Distribution (September 2018 to end of year). This report covers all three sub-products (P5.1, P5.2 and P5.3). It details the evidence gathered from the DNOs on current forecasting approaches and draws some similarities and differences between the network companies approach to forecasting. The report goes on to consider options and propose a preferred option for DNOs, TOs and the SO to undertake a Whole System FES. Sub Product 5.1 Current Forecasting Approaches Some notable observations from the DNOs responses to the forecasting questionnaire sent out by the product team include the following: There are many commonalities in DNO approaches to forecasting but due to different drivers for these in different DNO licence areas, there are also a number of areas where approaches are different by necessity; DNOs have local knowledge: In general, DNOs have a better understanding of the local resources within their licence areas compared to the SO and the host Transmission Owners (TOs) so a bottom up/top-down approach would be beneficial in future engagement with the SO on the development of the Whole System FES; 4

6 Load characteristics are changing: Load diversity assumptions based on historic data may no longer be adequate in future forecasts which may include low carbon technologies and distributed energy resources whose operating regimes could be significantly different; We need to be clear on terminology around scenarios: There is need to differentiate between the use of the terms "forecasts" and "scenarios" as these are currently being used interchangeably among the DNO community. Sub Product 5.2 Guideline / Common Framework A set of principles and objectives for a common framework were identified and a number of options were compared. Option 2, referred to as a Hybrid FES approach was preferred. This is considered as a practical way of collaborating on FES scenarios. Under the Hybrid FES approach, the SO would consult with the TOs, DNOs and the wider stakeholder community, to set out FES building blocks upon which the SO, TOs and DNOs can then base their FES scenarios to produce GB FES, and any additional scenarios as required by other network companies to better represent regional views. This use of common building blocks allows information sharing between parties and also enables a comparison of scenarios. The SO would continue to produce the GB FES and other network companies would produce TO or DNO level FES as they require. The scenarios used by each of the network companies would be expressed in the common framework/building blocks of the GB FES to allow stakeholders to understand and compare scenarios. Sub Product 5.3 Process for T-D Co-ordination At present, the GB FES production follows an annual cycle culminating in production of the GB FES in July each year. TO level and DNO level FES are not yet produced by all network companies and those that are produced are not yet produced annually. Key areas for co-ordination on a Whole System FES include: Starting Point The GBSO and relevant network owners would agree the starting point for the levels of existing demand, generation and other DER positions. Building Blocks Early in the GB FES process, the GBSO and network owners would agree the building blocks that are needed to cover requirements for building both the national and regional scenarios. Stakeholder Interactions The GBSO and network owners would agree a strategy for stakeholder interactions to ensure that the information provided by specific stakeholders to network companies is used effectively. Regional Output Levels - The GBSO and network owners would agree how national levels of demand, generation types etc. are best apportioned regionally. Effective liaison here will enable regional drivers to be taken into account to provide a more considered position on local levels of demand, generation and other DER. Generic templates have been developed to facilitate scenario output data exchange. 5

7 It is not proposed that the high level scenarios would have to be the same across different companies. It is also not expected that the different network company FES would follow a particular production timeline. Further Work and Implementation Work to implement a whole system FES will continue in 2019 supported by a specific Open Networks product. At this stage it is anticipated that 2019 FES would include tactical improvements to electricity network regional assessment. Recognising the need to extend the whole system co-ordination beyond electricity, work is also proposed to agree how interactions with other vectors should be handled. Building on the 2019 work, the 2020 FES would be first year of Whole Electricity System approach with agreed processes and data exchange. Ofgem Led Work on Core Scenarios As part of development of the RIIO-2 Price Control, gas and electricity network companies are developing a Single Energy Scenario. This will provide a common reference point against which each individual network company s RIIO 2 business plan can be assessed, with the drivers for any deviations in core assumptions explained (e.g. regional variations, or informed from stakeholder feedback). In developing this scenario, network companies have utilised the building block approach proposed, agreeing a view for each building block that has a material impact on network investment. This approach is consistent with the Whole System FES approach developed in Product 5. It is important to note that network companies have different views of the future for some building blocks, and as a result the Single Energy Scenario will form a compromise position between these views, and cannot be assumed to reflect the view of any individual network company. 6

8 2. Introduction and Purpose As part of the Open Networks Project s Phase 2 plan for Workstream 1 (T D Processes), Product 5 (Whole System Future Energy Scenarios (FES) seeks to establish the framework to produce distribution level FES on a priority basis. These will be aligned to the GB FES produced by the GBSO in order to support whole system planning. This product supports the following Workstream objectives: 1. Enable greater distributed energy resource (DER) access to networks and services by facilitating the development of mechanisms to identify and publish Distribution System Operators (DSO) service requirements for priority areas and publishing and taking forward action plans to enable the timely connection of flexible resources where these can avoid investment and unlock connection capacity; 2. Introduce whole system investment planning by developing DNO capability and establishing improved data and models to support whole system investment and operation; and 3. Provide further information to customers by collating and publishing information for DER customers to support connections and service provision. This would include future scenarios which are necessary for identifying resource volumes, service requirements and levels of curtailment. The work is intended to ensure that the future scenarios used to support industry processes are produced consistently and are aligned across network operators. It will support the production and publication of scenarios to be used by network operators and stakeholders. This work is closely linked to Workstream 1, Product 1 (Investment Processes), Product 6 (Regional Service Requirements) and Product 12 (TSO/DSO & DER Data Requirements). The Whole System FES product is made up of three sub-products scheduled to be delivered over the course of These sub-products and associated deliverables are as follows: 1. P5.1 Review current forecasting approaches January to June 2018; 2. P5.2 Develop and agree guidelines/common framework to produce distribution style FES on a priority basis April to September 2018; and 3. P5.3 Establish process for FES coordination across Transmission and Distribution September 2018 to end of year. This report covers all 3 sub-products of Product 5. It details the evidence gathered from the DNOs on the current forecasting approaches and draws some similarities and differences between the network companies approach to forecasting. It goes on to propose the framework for Distribution FES (DFES) and the process for co-ordination across DNOs, with TO s and with the GBSO. 7

9 3. Scope This report includes the full scope for deliverables P5.1, P5.2 and P5.3. An extract from the 2018 Project Initiation Document is provided below PID Extract for Workstream 1 Product 5 Whole System FES - Establish a whole system approach to FES: i.review current forecasting and look for best practice including input from academic research. ii.develop and agree guidelines/ common methodology to produce a distribution style FES on a priority basis - per GSP and by region/licence area. iii.establish process for FES coordination across T&D Product 5.1 Review Current Forecasting Approaches (part i. from PID) Product 5.1 reviewed the current forecasting approaches among the DNOs to identify similarities and differences, understand the key factors in the development of forecasts, the challenges faced by the network companies and how the forecasts are used. A key part of Product 5.1 was the completion of a forecasting questionnaire by the DNOs and the subsequent analysis of the responses. This included: Review current forecasting approaches by the DNOs through the questionnaire Learn from Distribution FES publications to-date Consider drivers for current approaches Consider challenges to current and desired forecasting approaches Product 5.2 Whole System FES Framework Development (part ii. from PID) Product 5.2 compares frameworks for the production of distribution style FES alongside the GBSO produced FES. This starts with a high level consideration of GBSO FES methodology and moves on to consider Whole System FES framework options. The work considers the use of scenario building blocks to provide a common language across all FES and how best to align regional assumptions with the overall GB position. Product 5.2 also goes on to consider the data exchanges that would be required between network companies. Product 5.3 Process for T&D FES Coordination (part iii. from PID) Product 5.3 develops a high level process for co-ordination between the GBSO, TOs and DNOs. This begins with the current processes and timelines used by network companies including licence and code requirements. The preferred process is identified. Further work The scope of the P5 product in 2018 did not include the implementation of the proposed framework to produce scenarios. Proposed work beyond 2018 to further develop and implement a Whole System FES is considered in section 9. 8

10 4. Sub-Product 5.1 Review Current Forecasting Approaches 4.1 Methodology A forecasting questionnaire was prepared and circulated to all GB DNOs to gather their responses to key questions. The questions were designed to help understand the current forecasting approaches used by the DNOs. The questionnaire is one of the key activities for this deliverable and it enabled the Product 5 team to understand what forecasting activities are currently being carried out by the DNOs, what they are used for, similarities and differences between DNOs approaches and the drivers behind these, challenges faced and the direction of travel within the DNO community. This information, together with the desired forecasting outcomes, allowed the Product 5 team to carry out a gap analysis for P5.2 Development of a common framework to produce distribution style FES on a priority basis. By carrying out a gap analysis, the areas that need addressing were identified. For deliverable P5.1 specifically, the following activities were undertaken: Requested information from all DNOs. A questionnaire was prepared by the Product 5 team and peer reviewed by WS1 subject matter experts (SMEs) before being sent to DNOs in early March Responses were received from all DNOs by mid-march In April 2018, the Product 5 team reviewed the questionnaire responses and identified similarities and differences in forecasting approaches. The findings were presented to the WS1 group and a summary of these is provided in Appendix 1. This report documents the findings and observations made by the Product 5 team on the overall approach and current direction of travel within the DNO community. 4.2 Forecasting Questionnaire The forecasting questionnaire consisted of 12 questions covering the following areas: The forecasting activities undertaken by the DNOs in their licenced areas beyond the Grid Code Week 24 requirements, the techniques used and to what degree active and reactive power are forecasted; Types of resources explicitly considered in forecasts, level of data clustering and aggregation used and how diversity is taken into account; What the forecasts are used for and time horizon for forecasts; Whether multiple scenarios are considered and, where this is the case, the objectives for creating multiple scenarios and whether the scenarios would be aligned to any of the National FES produced by the SO; Whether some distribution connected generation are excluded in forecasts, e.g. large generation (defined as per Grid Code) and whether network limitations are considered to restrict the forecast volumes; What type of parameters are forecasted, e.g. peak, minimum, average for particular days or time of day etc; 9

11 How the information used in developing the forecasts is obtained and whether there is collaboration with other network owners in the production of forecasts particularly where there is a common interface; and Key challenges in producing the forecasts. The questionnaire was sent to all 6 DNOs covering the 14 licenced DNO areas in GB. All DNOs responded to the questionnaire. 4.3 Review of DNO Responses A review of the responses was undertaken by the Product 5 team. A high level summary of the responses is given in Appendix 1 where the similarities and differences are drawn from the responses. Overall, the responses provided a good understanding of the current forecasting approaches undertaken by the DNOs. This provides a vital input into the gap analysis exercise for the development of a common forecasting framework in P5.2. Observations from the responses are presented below. 4.4 Observations General All DNOs carry out load forecasting to support the development of the Grid Code Week 24 submission, the Long Term Development Statement (LTDS) publication, the regulatory submissions of load indices and the identification of potential network reinforcement or flexibility service requirements. Beyond this, there are various levels of forecasting activities to different levels of detail and horizons across the DNOs depending on the specific challenges faced in the DNO licenced areas. There is currently some collaboration between the System Operator (SO) and DNOs, and among neighbouring DNOs, and between DNOs and IDNOs, in the production of their respective energy scenarios and forecasts. This collaboration is however limited, and mainly dictated by specific needs that arise on specific parts of the network. A wide range of distributed energy resources (DERs) and low carbon technologies (LCTs) have been identified for consideration in, and development of forecasting tools and methodologies to varying degrees by some DNOs. In general, the DNOs have a better understanding of the local resources within their licenced areas compared to the SO and the host TOs, therefore a bottom up/top-down approach would be beneficial in future engagement with the SO on the development of the Whole System FES. This will drive a more accurate picture of the national scenarios when considering the regional spatial disaggregation. Some of the resources identified in forecasts include wind, photovoltaic (PV), heat pumps, electric vehicles (EV), demand side response (DSR), flexibility services from domestic time of use tariffs (ToUT), industrial and commercial (I&C) DSR, smart charging of EV, domestic energy storage, enhanced frequency response (EFR), behind-the-meter commercial storage, storage co-located with large scale distributed generation, industrial and domestic combined heat and power (CHP), 10

12 air conditioning, active network management (ANM), biomass, biogas, landfill gas, flexible/peaking plant, hydro, etc. Some DNOs are beginning to consider how they could better understand the potential for non-build solutions from their forecasts. Generally, DNOs have a good understanding of what generation will connect but there is greater uncertainty as to exactly when it will connect and how it will be used (profiles). This is in relatively shorter time scales (~ 5 years) compared to timescales for large transmission connections The need for a whole system forecasting framework In order to develop a consistent forecasting approach between the SO and the DNOs, the forecasting work within the DNOs needs to progress significantly before meaningful alignment can take place. Development of a common forecasting approach (P5.2 deliverable) among the DNOs should accelerate the work to establish a consistent approach between the SO scenario work and the DNO forecasting to achieve Whole System FES. The purpose of developing consistent future energy scenarios by all network companies, including the SO, is to facilitate the identification of system needs and to support the future energy landscape. The FES are seen as different and equally plausible future outcomes, and that the constraints for these scenarios (cost, lead time, technology, network capacity, etc) are not considered at this stage. Challenges arising from the use of multiple scenarios will require a common approach to ensure that the different solution options under the different scenarios can be considered appropriately in arriving at investment decisions, e.g. least regret approach adopted by the SO for the NOA cost benefit assessment or other approaches based on probability weightings for different scenario outcomes. These challenges are out of scope for this product Forecasting horizon and uncertainty Load forecast data forms the basis of network planning and development and, going forward, it is clear that the increasing number of DER and LCT which have many possible operating regimes is greatly increasing the level of uncertainty in network planning and development activities. This will also affect network operation and maintenance activities. Increasingly, DNOs are producing more data forecasts than the minimum requirements based on their licence obligations. This trend is likely to continue as the penetration of DER and LCT increases as well as the DSO and potential new markets emerge in the new flexible smart world. Up until recently, the level of certainty within the 5-year horizon has been relatively high and it is acknowledged that with increased uncertainty, it may be beneficial to consider a scenario based approach even for this near-term time horizon. For horizons longer than 5 years, a FES approach will be required in order to address uncertainty meaningfully within the investment frameworks. There is need to differentiate between the use of the terms "forecasts" and "scenarios" as these are currently being used interchangeably among the DNO community. It is important to distinguish that one approach to forecasting can be a scenario-based approach. The scenario definitions are not forecasts, but the application of the scenario assumptions can be used in various combinations to form either one forecast or a range of possible forecasts with varying levels of confidence or probabilities. It is acknowledged that different business activities may require different types and levels of forecasts. 11

13 4.4.4 Forecast parameters In addition to power or resource capacity forecast parameters (for example, installed MW capacity for a given technology, number of EVs, heat pumps, etc), it may also be necessary to forecast other parameters such as energy or load factors associated with these resources which could represent load profiles or behaviour of the underlying resources. While it is reasonable to assume that these behaviour parameters may be dictated mainly by market arrangements, the assumptions made on these and the utilisation of flexible solutions can have a significant impact on the network capability and performance. These assumptions therefore need to be considered carefully, for example, consumer behaviours around EV charging could be disproportionately disruptive if not modelled appropriately Diversity Diversity assumptions based on historic data may no longer be adequate in future forecasts which may include LCT, DER, etc whose operating regimes could be significantly different. More detailed forecasts based on the constituent energy elements at a higher time resolution than the traditional seasonal approach would be valuable in informing diversity assumption going forward. e.g. the interaction between wind, solar, storage, ANM, DSR would give more insight into credible assumptions on diversity. Similarly, load growth assumptions would significantly benefit from this approach Source of forecasting data A wide range of sources needs to be considered in the development of credible FES. Current practice considers connected resources, metered and SCADA data, Government and Local Authority policies, plans, projections and targets, gross value added (GVA) and social demographic information from sources such as Experian Mosaic, EV registrations from the DVLA and stakeholder engagement. All these sources are currently being used to different degrees by different DNOs Collaboration There will be need for improved collaboration between network companies to ensure consistency in the way the scenarios are produced in order to allow coordinated network/system development across different network ownership boundaries. The relationship between FES and DNO forecasting cycles will need to be defined to ensure that the Whole System FES are produced in a consistent and timely manner, to feed into the various investment decision making processes, publications and reports. 12

14 5. Sub-Product 5.2 Whole System FES Framework Development 5.1 Principles and Objectives The Whole System FES Framework is founded on several principles which form the basis of the framework objectives. The principles cover a wide range of areas to ensure that the Whole System FES are robust against a range of regional and national potential energy futures and that they are suitable for informing whole system thinking, identifying system requirements and whole system outcomes. Whole System FES Framework Principles: a) Common and Transparent Approach: Scenarios developed by network companies will be constructed with reference to a common set of building blocks and communicated using consistent language. This will enable customers to understand and compare scenarios across networks and companies. Where practical, standard methodologies, reports, and data templates will be used to efficiently communicate data. b) Consistency: From a whole system perspective, the scenarios should be agnostic to system ownership so that there are consistent assumptions across ownership boundaries without losing the ability to account of uncertainties in the underlying data. c) Communicability: It is very important that the scenarios can be communicated at the right level of detail without losing the ability to trace back to the fundamental building blocks of the scenarios. d) Flexibility: From time to time, the energy landscape changes. It is important that the scenarios can be updated to allow latest information to be taken into account without losing consistency and comparison between scenarios. Whole System FES Framework Objectives a) To ensure that the future energy scenarios are produced consistently and are aligned across network owners and operators. b) To support the production and publication of scenarios to be used by network operators and stakeholders in system requirements analysis, whole system solution development and system operation. The Whole System FES Framework is mainly focusing on the electricity sector at this stage, however these principles and objectives are applicable to a wider range of energy vectors to be incorporated in future work. 5.2 Framework Options In the process of deriving what a whole system FES should look like it was important to take onboard the different parties views on how the FES should be built up. The current methodology of constructing the FES means that regional variation across the country may not be clearly represented. Reflecting this, many of the options considered look to incorporate distribution level forecasting to guide a national Whole System Future Energy Scenarios document. 13

15 Regional variations and trends mean that it may not always be possible for all parties involved in the creation of a Whole System FES document to fully agree with its outcome. This would result in the creation of different future energy scenarios by different parties and then combining them into a single whole system document. The range of considered options also reflect the different levels of forecasting and development of Distribution Future Energy Scenarios. These are shown Table 1 below. Table 1. Options for the Whole System FES Framework Option 1 Common GB FES Description All DNOs and TOs would work with the SO to produce scenarios and associated assumptions and levers. The levels of DER included regionally and nationally would be informed by DNO local and SO national assessment. The scenarios would be based on common building blocks and rules across all DNOs, TOs and the SO. The scenarios would include the Distribution FES and would be aligned across Transmission and Distribution. 2 Hybrid FES DNOs, TOs and SO would collaborate on the GB FES at GSPs. The levels of DER included regionally and nationally would be aligned and informed by DNO local and SO national assessment. Network companies own best view scenarios would be expressed in the common framework/building blocks of the GB FES to allow stakeholders to understand and compare scenarios. The GB FES would be produced as well as TO and DNO FES when required by the relevant network companies and their stakeholders. 3 Separate FES DNO/TO Led DNO scenarios would be produced independently and would be largely based on a bottom up assessment of local DER. Assumptions and results would be provided to NGET to incorporate into the GB FES as appropriate. A common framework and common building blocks would not be used. 4 Separate FES SO Led The SO would produce scenarios to GSP level based on a top down assessment of the GB network. This would include DER levels. Assumptions and results would be provided to network companies to incorporate into their FES as appropriate. A common framework and common building blocks would not be used. 14

16 5.2.1 Options Assessment The options were assessed based on the framework principles established in Section 5.1. Table 2 summarises the assessment of the options against these principles. Table 2. Summary of options assessment against the Whole System FES Framework principles Principle Comments Option Consistency Common and Transparent Communicability Flexibility 1. Common GB FES 2. Hybrid FES Impractical to implement and restricts regional variation. Requires input from Gas Has benefits from option 1 and additionally allows flexibility. 3. Separate FES DNO/TO Led Lack SO/DNO collaboration and therefore do not facilitate joint 4. Separate FES SO Led planning of the networks to accommodate future requirements. Option 1 (Common GB FES) was viewed as Impractical to implement due to its reliance on all DNOs, TOs and the SO working together to agree a combined FES document. It is unlikely that a consensus would be reached, and it also was viewed as likely to restrict regional variation. Option 2 (Hybrid FES) was considered as a practical way of collaborating on FES scenarios. In consultation with the TOs, DNOs and the wider stakeholder community, the SO sets out FES building blocks upon which the SO, TOs and DNOs can then base their FES scenarios to produce GB FES, and any additional scenarios as required by the parties to better represent regional views. This option will use common building blocks to allow information sharing between parties. Option 3 (Separate FES DNO/TO Led) was viewed as not in the spirit of collaboration. This option would see up to 14 different DNO FES documents being produced and then passed to the SO to combine into a single whole system FES. There would be little to no guidance upon how the documents are produced and no shared common methodology for the production. Stakeholders may struggle to compare between different FES documents. 15

17 Option 4 (Separate FES SO Led) was also viewed as not in the spirit of collaboration. This option would see the SO produce a national FES document annually and then this is passed to the DSOs to embed within their own FES documents. This option may not reflect regional variations effectively Preferred Option Following discussions; the working group s majority preference was to adopt Option 2 Hybrid FES. It should be noted that this was seen as a compromise and was not the preferred option for all group members. ENWL, in particular, would prefer the Hybrid FES to be a stepping stone towards a process where network companies would work more closely to agree the headline scenarios to be used at both the national and regional levels. ENWL acknowledge that further work with other energy vectors would be needed to achieve this. ENWL carried out an Low Carbon Networks Funding (LCNF) project (ATLAS) to establish best practice approaches to distribution system network modelling. Following on from the project ENWL have developed the ATLAS project learning into business as usual. ENWL have also invested in establishing its own DFES building capability and are committed to working with other the other group members to use the hybrid FES as a stepping stone to establish best practices across the industry. 5.3 Building Blocks The scenarios are developed using a structured approach that is called the Scenario Framework, shown in Figure 1 below. This shows the stages in creating scenarios, starting with the Scenario Matrix, where we decide how many scenarios there will be, and how they will be differentiated at the highest level. There are then stages with increasing levels of detail, culminating in the Levers, which describe how we choose the inputs into our detailed models. 16

18 Figure 1: Scenario Framework Further detail on the Scenario Framework can be found in the Scenario Framework Document on the FES website - Under the chosen option in Section 5.2, the combination of the resource and the levers in the Scenario Framework represent the building blocks upon which all scenarios (including those in addition to the SO scenarios) must be constructed to ensure consistency and ease of understanding. Building blocks are based on a common set of assumptions and levers. Industry collaboration is required in developing a common set of building blocks. Figure 2 shows an illustration of building blocks as proposed in this work. (Only a small number of the building blocks are illustrated in Figure 2.) 17

19 Technological Blocks Other Blocks Block 1 Distributed Solar Installed Capacity Block 2 Marine Generation Installed Capacity Block N GDP Growth Rate Block N+1 End Consumer Electricity Price High No incentives required No incentives required Levers Medium Reliant on stakeholder feedback Reliant on market intelligence and stakeholder feedback Low Consented schemes only Consented schemes only Figure 2. Illustration of the scenario building blocks It is important to be clear about what part of FES are inputs and what part are outputs. Building blocks form the basis for building any scenarios by nature of them being inputs into scenarios. They are essentially the driver levels (High, Medium, Low) associated with the levers. For example, Table 3 shows the solar generation building blocks that currently go into the SO FES. 18

20 Table 3. Example of solar generation building blocks showing the driver levels for two FES Assumption name (Block) Description Community Renewables Two Degrees Solar generation - large Level of installed capacity of solar - large Medium Push to decarbonise using small scale generation. High Push to decarbonise but prefer larger solar installations Solar generation - small Level of installed capacity of solar - small scale High Push to decarbonise using small scale generation. Medium High levels of renewable generation exist in a decarbonised scenario, but this centralised scenario favours large scale generation. These building blocks are then processed by running them through a model to produce outputs. The outputs from the model are the quantities to be used in future planning. An example of the solar outputs from FES 2018 is shown in Figure 3. Figure 3. Example of scenario outputs 19

21 The modelling itself should be unconstrained in the sense that there are no pre-conceptions embedded in the inputs which affect the quantities that are output. Obviously though the model itself constrains the output as it contains physical limits imposed by the realities of engineering and geography. For example, solar potential regionally constrains the output so that a high scenario will yield higher PV in a Southern area like Cornwall than in a more Northern county like Yorkshire. None the less, if the building block is at a high level, it is still the same high scenario for both regions. One of the sense checks required for a common FES is on whether the outputs from the High/Medium/Low drivers look reasonable both nationally and regionally. The interface between the SO and the DNO at the Grid Supply Point is one area where this kind of collaboration can really add value to the GB scenarios. Another sense check is based on the understanding that inputs do not necessarily stand alone and that there can be interactions between them. Therefore, the building blocks in scenario building are based on the inputs. For example, Table 4 shows that a scenario with a high driver for electrification of heat will have an interaction with the driver for the gasification of heat. Because of this interaction a scenario cannot be built from mixing and matching the outputs of the two different scenarios. Table 4. An example of scenario block interdependencies Assumption name (Block) Description Community Renewables Steady Progression Tax regime for UKCS extraction New heat technological adoption rates The tax discount on gas extracted from the North Sea and the write-offs/allowances for costs incurred in decommissioning and exploration and production. Scale is relative to the tax regime in Rate at which new heat technologies are purchased and brought to market Low GB shifts focus towards decentralised production and decarbonisation and hence UKCS natural gas production reduces further in priority High New heat technology incentivised if it accelerates decarbonisation with consumers also willing to pay higher upfront price High Active interest in maximising the available reserves from the UKCS for cost affective GB consumption Low New heat technology not adopted unless it is lowest upfront cost option The Benefits of a Common Language Building blocks provide the basis for a common language that can be used to describe scenarios regardless of who produces them and how they are produced. A common language allows any set of scenarios to be seamlessly communicated to stakeholders in a language they expect and understand. Pitching the common language at the level of the component building blocks allows 20

22 substantial flexibility and freedom in the choice of how the scenarios are presented in different years and to different audiences. For example, a scenario with many of its building blocks set to high could potentially be presented using an axis showing economic prosperity to an audience of economists while the same building blocks could equally be shown on a green ambition axis to an audience of environmentalists. Thus, the approach enables scenarios to be compared in that component parts are transparent, but without compromising the presentational choices and changing or differing priorities of the SO, TOs and the DNO s. Adopting a common language also serves to overcome problems of relativity. That is, the output from the high solar building block is a scenario with different levels of solar generation capacities in the Northern and the Southern regions, but it is transparent that both regions have used the same common building block. To be clear, the common language of building blocks is based on national drivers being input into scenarios, not on the regional quantities in the outputs. One other advantage of the common language is that it allows for there being a range of future energy scenarios. So as well as the existing NGESO GB scenarios, which are aimed at capturing the credible range of possible futures, it also accommodates the development of specialised regional scenarios or even agreed single common planning scenarios across utilities. Any sets of scenarios are transparent and comparable as long as they are all expressed in terms of the common building blocks. Commonality also encourages robustness in the models themselves. A model will produce outputs from known building blocks. If two models with the same inputs produce widely differing outputs it becomes clear that further examination of the internal workings of these models are required. Also, given forecast uncertainty, future energy scenarios have to consist of more than one scenario in order to capture the range of possible futures. It would be expected that any specialised scenarios fall within the range of the NGSO GB scenarios. If not, it provides a further feedback loop for continuous improvement within these. 5.4 Scenario Building Scenarios are used to help us plan for an uncertain future. The political, economic, technological and consumer landscapes which drive our energy systems are changing at an unprecedented rate. Against this backdrop it would be unhelpful to forecast a single pathway for our energy future over the long term. Instead, scenarios are developed to explore a range of credible futures and to foster better understanding of the uncertainties facing the energy industry. It is important that these scenarios properly reflect up to date information and views of the future, and so require regular validation with key stakeholders. As per the Electricity Transmission licence, the scenarios used in the SO FES are tested regularly with stakeholders. Ahead of each annual launch and publication of the FES in July, information on the scenarios to be used, and stakeholder views captured during engagement campaigns, is published in a Stakeholder Feedback Document on the FES website

23 For several years the FES consisted of four scenarios positioned on a 2x2 matrix formed by a prosperity axis and a green ambition axis. Ahead of the 2018 work, the SO engaged with a wide range of stakeholders at dedicated workshops, through an online survey and bilateral discussions. Some common key themes emerged from this feedback, including: Continuing support for a structured approach which uses a framework approach and 2x2 matrix with four scenarios; Broad support for progressive rather than radical change which allows some consistency with previous year s analysis; The relationship between Green Ambition and Prosperity has changed; for example, the cost of some renewable technologies is reducing significantly; Agreement that an important variable in determining future energy pathways is the degree of decentralisation. This is defined as meaning where on the energy system solutions are physically located, for example whether generation is connected to the transmission network, or to the distribution network; Varied views as to how many scenarios should achieve the target of 80% reduction in carbon emissions from the 1990 level by The majority view was that there should be more than one pathway to 2050 compliance, but also that not all of the scenarios should meet the target. Taking account of this engagement feedback, FES 2018 had four scenarios structured in a 2x2 matrix against axes of speed of decarbonisation and level of decentralisation (see Figure 4 below). The speed of decarbonisation axis combines policy, economics and consumer attitudes. All scenarios will show progress towards decarbonisation from today, with the scenarios on the right of the matrix meeting the 2050 target. The level of decentralisation axis indicates whereabouts on the energy system solutions are physically located, moving up the axis from large scale central, to smaller scale local solutions. All scenarios will show an increase in decentralised energy compared with today. This approach allows two of the scenarios to meet the 2050 target, but via different routes, addressing one of the key challenges encountered when using the previous matrix and reflecting stakeholder feedback. Retaining four core scenarios and the 2x2 matrix retains some elements of the previous structure to aid comparison. As in previous years, security of supply for both gas and electricity will be achieved across all the scenarios. 22

24 Figure 4: The SO FES for The Scenarios in Detail We can give a general overview of our intent for the scenarios by considering the broad themes of power demand, transport, heat and energy supply. As an example, details of the Community Renewables scenario from the SO FES 2018 is given below. Further descriptions examples can be found in the stakeholder feedback document mentioned above. 23

25 Community Renewables For this scenario we will explore how the 2050 decarbonisation target can be achieved through a more decentralised energy landscape. Power demand: With the drive towards decarbonisation, together with the high use of electric vehicles (EVs) and deployment of heat pumps, smart technology will be extensively used to manage peak electricity demand. Appliance efficiency will improve, and we expect to see greater use of demand side response. Transport: EVs will be the most popular personal vehicle and we will explore home and destination charging for this scenario. For commercial vehicles, hydrogen is expected to become more prevalent as the fuel of choice to aid the decarbonisation target. Sharing of vehicles will also feature in this scenario. Heat: Homes will become more thermally efficient as we drive towards decarbonisation, and the landscape for heat in this scenario will be predominantly heat pumps supplemented by green gas with increased use of district heating. Power supply: In this decentralised and decarbonised landscape, there is a reliance on green generation. Onshore wind and solar, co-located with storage, will dominate and we will explore whether this pathway can achieve the 2050 target without Carbon Capture and Storage (CCS). Flexibility is provided by small scale storage, small gas fired plant and hydrogen production. Gas supply: Gas from the UK Continental Shelf (UKCS), Norway and Liquefied Natural Gas (LNG) remains important in the short and medium term. However, in this scenario where we explore achieving the 2050 target without CCS, green gas, predominantly located at the distribution network level will be most prevalent. Hydrogen in this scenario will be produced via electrolysis. 24

26 5.5 Collaboration Interaction with other Open Networks products The development of a framework to support the production of a Whole System FES is viewed to be one of the main outputs from the Open Networks Project. The Whole System FES will provide valuable information to developers as well as inform investment planning decisions. The FES will require data transfers between businesses, collaboration on the format and content of the FES document. Table 5 details the anticipated interaction with other Open Networks products for the 2018 workstreams. Table 5. Interaction between the Whole System FES Product and other Open Networks products Product WS1 P1 Investment Processes WS1 P2 -- DER Services Procurement WS1 P3 - Industry Framework Interactions WS1 P6 - Regional Service Requirements WS1 P12 - TSO/DSO & DER Data Requirements WS2 P4 - Information on Flexibility Services WS5 Interaction Whole System FES will be used to inform system requirements, development of whole system solutions and to support investment decision making. Whole System FES will be used to derive what DER services need to be procured The levels of DER services procured will be one of the inputs into the Future Energy Scenarios Currently, production of the national FES is undertaken by the SO to satisfy its licence obligation. The process for production of a Whole System FES may require licence and code modifications. Service requirements and FES should be aligned to provide a consistent message. To generate the whole system FES there will need to be new data transfers between companies. The Whole System FES will act as a sign posting tool for DER providers as to where additional requirements may develop. When developing the Whole System FES the parties involved need to be conscious that it could promote investment ahead of need. Any developments within the Whole system FES will need to be communicated out to the wider stakeholder population. Any feedback from stakeholders will need to be fed back into the Whole System FES development. 25

27 5.5.2 Interaction with Industry Processes Whole System FES development is closely related to some existing industry processes, particularly the SO s FES process and the Grid Code Week 24 data submission process by the DNOs. (Whilst the current Grid Code Week 24 process is not scenario based, the forecasts produced by DNO s are a key input to the FES and other network company outputs.) The SO FES and Grid Code Week 24 data submissions lead directly into the Electricity Ten Year Statement (ETYS) and the Long Term Development Statement (LTDS) respectively. Data from the Week 24 submission and the FES are also used in the Distribution System Operability Framework (DSOF) and the System Operability Framework (SOF). The production of scenarios under the Whole System FES Framework will improve the quality of these publications which are directly reliant on forecasting data. Rationalisation will be required to avoid duplication of work when the Whole System FES framework is introduced so that these future energy scenarios can be produced efficiently. Section 6 covers the process for Transmission/Distribution FES Coordination Regional Differences Regional differences are dictated by several factors such as local government policies, geography and climate as well as key economic activities. It is important that these differences are captured in the development of future energy scenarios to ensure that a representative picture of the future energy landscape is used in the identification of future system needs which allows fit for purpose and economic whole system solutions to be developed. A few examples of regional differences are given below based on several different DNOs. These examples show that regional drivers can vary significantly from one local area to another, hence the importance of accommodating these in the Whole System FES. Northern Powergrid (NPg) It is acknowledged that there may be regional special cases that mean the mix of H/M/L drivers in a scenario (national drivers) may not work in a region. This provides a basis for issuing a DNO FES and explaining where the H/M/L drivers comes from for any building blocks which are outliers. Regional differences need accommodating within the common approach so that they are adequately expressed and their relative position within the framework understood. In NPg there are regional differences dictated by the industrial history, the geography and the climate which affect the type and scale of generation type adopted. For example the coastline areas make offshore wind an option. The climate means that solar generation is unlikely to reach the level seen to connect in the South West of the UK. In terms of the new low carbon demand technologies such as electric vehicles and heat pumps there are no exceptional circumstances of any note. The industrial history meanwhile may impact on the Demand Side Response potential in the region. Electricity North West (ENWL) Currently the North West of England is caught in a rapid development phase. Fuelled by the promise of improved transportation links and development through the Northern Power House; 26

28 areas in and around Manchester and Cheshire are seeing an accelerated growth. These changes are likely to drive a greater amount of change in land usage and demand profiles compared to other areas of the country which are seeing a decrease in growth rate. Revitalisation of urban areas will also drive a growth in the adoption of LCT which may exceed other areas of the country. SP Distribution (SPD) Regional differences for the SPD area are focused on the generation mix within the geographical area. Onshore wind is the largest driver of embedded generation within this area. This, from the years 2010 to 2017, has driven three times increase in the levels of embedded generation connected to the network. As of 2018 approximately 70% of GSPs within the area have embedded generation connected. With regards to demand, this has remained relatively constant across 2012 through to Overall energy consumption (kwh/mwh) has reduced for both industrial and commercial and domestic customers between 2010 and This could increase the likelihood of additional GSPs within the area exporting to the Transmission network. There has also been a significant increase in the number of electric vehicles. The growth rate of electric vehicles, between 2011 and 2017, when adjusted for population is in line with the rest of Great Britain. However, this will likely change given differing Scottish Government targets on EV sales. Scottish Hydro Electric Power Distribution (SHEPD) In the north of Scotland area managed by SHEPD, a similar trend to the SPD area is observed. In addition to high embedded wind generation activity in this area, there is already a high penetration of hydro schemes and many GSP and increasingly many more are exporting power to the transmission system for considerable amounts of time during the year. As such, active network management is actively being pursued in this area, and there is high potential for flexible solutions. Western Power Distribution (WPD) Western Power Distribution s licence areas cover South Wales, South West and the Midlands, stretching from the Isles of Scilly off the South West coast, through to the coastal resort of Skegness. The large differences in demand, generation and storage capacities across those areas require a detailed local understanding. WPD s modelling studies are informed by engagement with local and regional stakeholders including local authorities, consumer groups and developers. This approach enables the creation of nuanced scenarios that reflect local and regional differences including: High solar irradiance in the South West The Welsh Government s support for wind farms Rapid development of the manufacturing sector in the East Midlands Interest in connecting large quantities of battery storage in the West Midlands UK Power Networks (UKPN) 27

29 UK Power Networks serves a diverse geographic region. This ranges from the highly urban environment of London to the more rural areas of the North Norfolk coast. With respect to the former increases in network demand are predominantly driven by both strong economic and population growth. The rural areas of its networks have seen a significant increase in the deployment of low carbon generation, particularly large scale ground mounted solar. A more recent development has been the interest in the deployment of large scale battery storage including co-location with solar PV. The urban areas of its networks are seeing increased take up of electric vehicles and deployment of the associated charging infrastructure. A key enabler of this is local government policy, where in London in particular, the Mayor has introduced a range of incentives to promote the take up of electric vehicles Data Exchange Formats Data on current demand, generation and storage installed capacities, as well as yearly future demand, generation and storage changes need to be exchanged along with the relevant geospatial information to describe the boundary covered by the data. Geospatial data will be exchanged using GIS shapefiles. The data exchanged will be the per unit values distributed in each building block of the main technology types. For each licence area, a total absolute value of installed capacity, or peak capacity will be provided for each technology type listed above and guidance on profiles used in network modelling studies. For generation this will be split into the standard Ofgem defined categories. The suggested data is shown in Table 6, including demand and storage, in addition to generation. Table 6. Energy resource technology data to be included within the building blocks Generation Types Demand Types Storage Types Biomass & Energy Crops (not CHP) Baseline Demand Batteries Hydro Electric Vehicles Pumped Hydro Landfill Gas, Sewage Gas, Biogas Airsource Heatpumps Mechanical flywheels (not CHP) Large CHP (>=50mw) Groundsource Heatpumps Other Storage Medium CHP (>5MW, <50MW) Micro CHP (Domestic) Mini CHP (<1MW) Mixed Offshore Wind Onshore Wind Other Generation Photovoltaic Small CHP (>1MW, <5MW) Tidal Stream & Wave Power Waste Incineration (not CHP) Airconditioning 28

30 The GB FES could be improved by SO/DNO collaboration at the GSP interface. In particular it is worth considering sharing data which improves the regional distribution assumptions made in the GB FES such as: Postal sectors / postcodes supplied by each GSP. Number and types of customers supplied per GSP i.e. customer counts with a breakdown by customer types - industrial, commercial, residential, etc. Analysis of domestic demand per GSP. i.e. the number and capacity of LCT s not notified via Week 24, for example total number / capacity of EVs and heat pumps. Analysis of I&C demand per GSP. (Total I&C maximum demand) Data formats Some generic templates have been developed to facilitate scenario output data exchange. These are grouped into generation, demand and storage. Further details are provided in Appendix Stakeholder Engagement In preparation prior to publishing this information, stakeholder engagement sessions will be held within each licence area to understand the wants and needs of all relevant stakeholders, including industry, commercial, communities, local and national Government and organisations representing the views of domestic customers. These stakeholder events will be supported by SO, TOs and DNOs participating in this work. Following the development of this work, a launch event will be held in a central location to explain the outputs and next steps for better industry collaboration Communication of the FES There was an original aspiration for the methodology and reporting procedures used to produce the Whole System FES document to be common to the regional FES documents. Due to differences in experience and working practices between member companies not all group members were prepared to agree to utilising a common methodology and reporting procedures within their respective region specific documents Whole System FES Framework Review As the energy landscape evolves and new technologies are developed and the way we use energy changes, there will be need to continually review the Whole System FES framework to ensure that it remains fit for purpose to adequately cover all the key technologies and behaviours. To align with annual planning cycles, the Whole System FES framework should be reviewed annually to make sure that the building blocks allow for the key political, social, economic and technological factors to be represented within the Whole System FES. The review should take into account stakeholder 29

31 views to ensure that the FES produced according to this framework can be related to stakeholder needs Transitional Arrangements The forecasting survey undertaken as part of this work established that DNOs undertake forecasting activities using deferent approaches, mainly guided by the need for the future energy scenario data in their respective areas. There is recognition for the need to undertake more scenario development work among the DNO community which is reflected by the ongoing efforts by all DNOs to improve in this respect. The implantation of the Whole System FES framework is therefore likely to be in a phased approach rather than a step change. Transitional arrangements are therefore necessary to allow the DNOs the time to establish resources and the necessary internal systems and processes to not only prepare but use the Whole System FES within their investment planning processes. Tactical improvements in the development of the FES by the Electricity System Operator can be implemented in 2019 based on the Whole System FES framework. This will be in the form of more focused stakeholder engagement to identify the common building blocks for the preparation of 2019 FES. This will improve the quality of the FES and the efficiency of their production. Recognising that the full implementation of the Whole System FES will need endorsement from Ofgem and buy-in from all parties involved in their development, it is expected that the transition from current DNO forecasting activities to the Whole System FES framework will take some time. During this period of transition, the feedback gathered from the implementation will be used to update the framework to ensure that it is robust ahead of full implementation. Section 9 of this report provides details of the Whole System FES timeline. 30

32 6. Sub-Product 5.3 Process for T/D FES Coordination 6.1 Introduction Going forward, increased coordination is expected in a number of areas to: Improve assumptions at the interfaces between transmission and distribution networks. Assumptions and forecasting for FES will be aligned at grid supply points. Figure 5: Illustration of typical Transmission-Distribution Interface. Agree the building blocks needed to represent the GB wide and regional FES. For the GB FES, ensure that regional assumptions for particular drivers and resources are consistent with the local drivers. 6.2 Timeline for GB FES A high level timeline illustrating the production of the current GB FES document is shown on Figure 5 below. This comprises a number of stages including stakeholder consultation, high level scenario creation and detailed modelling. These result in the GB FES document being produced in July of each year. The timeline shown for the production of the GB FES is well established and supports subsequent outputs from the GBSO including the Electricity Ten Year Statement (ETYS) and the Network Options Assessment (NOA). 31

33 Figure 5. Timeline for Development of GB FES 6.3 Timeline for Network Company Forecasting and Data Exchange Processes A high level timeline illustrating the main stages of data managements for network companies in demand and generation forecasting is shown on Figure 6 below. This includes the week 24 and week 42 processes whereby the DNO s and transmission network companies prepare and share data on their networks and on the resources connected to their networks. Figure 6. Network Company Data Preparation and Exchange DNO data preparation largely takes place in the 3 4 month period after March clock change and this supports a number of processes including Long Term Development Statement (LTDS) production and Regulatory Reporting as well as the week 24 provision of demand and generation related data to the transmission companies around June/July each year. 6.4 Key Areas for T-D Co-ordination on GB FES The key areas for co-ordination between the network companies in production of the GB FES include the following: Starting Point The GBSO and relevant network owners would agree the starting point for the levels of existing demand, generation and other DER positions to be used in the FES. These starting points would be agreed for cardinal points such as winter peak. Building Blocks Early in the GB FES process (around September to October), the GBSO and network owners would agree the building blocks that are needed to cover requirements for building both the national and regional scenarios. This will enable the GB FES, separate 32

34 TO produced FES s and DNO produced FES s to be produced using building blocks that are common across the scenarios. Stakeholder Interactions The GBSO and network owners would agree a strategy for stakeholder interactions to ensure that the information provided by specific stakeholders to network companies is used effectively. For example, this may mean the alignment of meetings with stakeholders that are significant from both a national and regional perspective, or one of the parties taking the lead for bilateral meeting. Regional Output Levels - The GBSO and network owners would agree how national levels of demand, generation types etc. are best apportioned regionally. Much of this work would take place from April through to August each year when information for follow on processes such as the Electricity Ten Year Statement (ETYS) is produced. Effective liaison here will enable regional drivers to be taken into account to provide a more considered position on local levels of demand, generation and other DER. Generic templates have been developed to facilitate scenario output data exchange. These are grouped into generation, demand and storage and provided in Appendix 2. There is not expected to be alignment or agreement on the following areas. High Level Scenarios Outside of the wider stakeholder workshops and liaison, the GBSO would not have a separate sub-process with transmission and distribution network owners to agree the high level scenarios that are used for the GB FES. When network companies produce their own FES, these scenarios would be selected by the network company for its own use and would not necessarily be the same scenarios as used in the GB FES. Timescales for publication of GB and Regional FES Other network companies will produce and publish FES for their own use and for regional assessment. The scenarios and related documents would not necessarily be produced in a timescale aligned to the GB FES. At present, DNO FES documents are relatively new and it may be a few years before they are produced in an annual cycle in the same way as the GB FES. 6.5 Publication of GB FES and Distribution Level FES s Of the DNO s, WPD, UKPN and ENWL have recently produced Distribution level FES documents for their licence areas. Of the TO s SPT and SHETL have published scenario documents. The other DNOs and the NGTO are also considering the production of FES documents for their areas. It is possible that all network companies will have produced and published a FES document by end Current network company FES information and links to these scenarios are included in Table 7. 33

35 Table 7. Network Company FES Information Company FES Details Link National Grid SO Scottish Power Transmission Scottish Hydro Electric Transmission National Grid TO ENWL SSEN (Distribution) GB level drivers and scenarios - Consumer Evolution, Community Renewables, Steady Progression and Two Degrees. Scenarios developed for central and southern Scotland. Aligned with wider NGET SO GB scenarios with input from SP Distribution and local stakeholders North of Scotland Future Energy Scenarios report published which sets out a range of credible future energy scenarios for the north of Scotland transmission network around three broad themes of Proactive Decarbonisation, Local Optimisation and Cost Limitation. The GB TO is working on a FES publication to form the basis its RIIO-2 engagement. This will compare the existing GB FES scenarios for England and Wales with its central forecast. Regional insights for the Manchester, Cumbria, Lancashire and Peak areas and regional scenarios Active Economy, Green Ambition, Focus on Efficiency, Slow Progression and Central Outlook. SSEN is developing FES for its southern area covered by SEPD, applying a bottom up analysis to the National Grid s national FES. energy_scenarios_consultation.aspx Publications expected early in 2019 UKPN WPD SSEN is also developing a whole-system growth scenario model in the north of Scotland area covered by SHEPD, focusing on the area served by a Grid Supply Point and based on the national FES and other assumptions. To be included Industry aligned DFES for each licence area have been developed using the common framework, but building the data bottom up from engaging with local and regional stakeholders. The GB FES is produced and would continue to be produced annually. At this stage it is not clear whether the other network companies will produce annual FES documents or whether these will be produced less frequently. There is no expectation that the timescales for publication of distribution or transmission level FES documents would be coordinated with each other or with the GB FES. Whilst the use of common building blocks for the different FES s will enable regional FES documents to be compared with the GB FES and with other regional FES documents, it is anticipated that there will be different approaches to regional scenario design across the network companies. For example, in some cases, the GB FES scenarios might be applied regionally. In other cases, regional stake holder input and other local factors will lead to the use of additional or different scenarios to those used in the GB FES. 34

36 7. Stakeholder Feedback 7.1 Introduction As well as improving network company planning and decision making, it is intended that the provision of a co-ordinated transmission and distribution FES will provide a useful resource for other industry stakeholders to plan against. The work carried out by the Product 5 team has been informed by a number of separate engagements with wider stakeholders. These include a Whole System FES workshop on 21 st May, a presentation to the ON Advisory Group on 26 th September and an Open Networks industry webinar on 29 th October. 7.2 Whole System FES Workshop This workshop was held on 21 st May 2018 and was attended by representatives from all DNOs, TOs and the SO. Two consultancies also attended. These were Element Energy and Regen who have been closely involved in scenario development. Takeaways from the workshop included the following: The SO s FES methodology is good starting point Greater collaboration is needed between the SO and network companies There is need for systematic DNO/SO engagement rather than on an ad-hoc basis The Whole System FES framework should not be restrictive. Network companies should retain the flexibility to model other local scenarios to better represent specific possible future scenarios that are better modelled in detail at local level The development of Whole System FES should be prioritised on a needs basis High granularity of DER data at distribution level means that Whole System FES development is not an insignificant task requires to be appropriately resourced 7.3 Presentation to ON Advisory Group Progress on Product 5 and the development of framework options were presented to the ON Advisory Group on 26 th September Feedback on the approach and the preferred framework option were then put to the Advisory Group. The Advisory Group were supportive of the work. A few questions were asked on the alignment of electricity and gas vectors and also on whether DNOs would be using the DFES to help analyse their networks to produce Distribution level System Operability Frameworks (SOFs). 7.4 Industry Webinar Progress on Product 5 was subsequently presented on an industry webinar on 29 th October This covered Whole System FES framework options and the use of scenario building blocks to enable alignment between scenarios. The webinar had 90 participants. 35

37 The webinar sought feedback on the different approaches and on the preferred option of a Hybrid FES whereby DNOs, TOs and the GBSO would collaborate closely and would use the common framework and building blocks to describe their own particular scenarios so that different scenarios could be more easily understood and compared. Several questions were then covered in a detailed Q&A session. Several questions covered how the scenario building blocks might be used and how specific technology developments (e.g. hydrogen) might be covered. Other addressed scenario planning horizons. Whole system approaches including gas were encouraged. The alignment of the work with the Ofgem led work to produce a single best view scenario was also questioned. Finally, the timescales for introducing the preferred approach and establishing a whole system FES were explored. 36

38 8. Conclusions & Proposals Network Operator Approaches to Forecasting Network company forecasting approaches were reviewed and the following conclusions were agreed for sub-product 5.1: There are differences due to different drivers across licence areas. DNOs have a better understanding of local resources compared to the SO and TOs so a bottom up/top-down approach would benefit the development of the Whole System FES. Load characteristics are changing and diversity assumptions based on historic data may no longer be adequate in future forecasts which include low carbon technologies and distributed energy resources. Several DNOs have recently produced Distribution FES documents and other network operators are planning to do so. Whole System Framework Development For sub-product 5.2, options for a whole system FES framework were reviewed and a Hybrid FES approach was agreed by the majority of network companies. The Hybrid FES approach includes the following elements: DNOs, TOs and SO would collaborate on the GB FES at GSPs. The levels of DER included regionally and nationally would be aligned and informed by DNO local and SO national assessment. Network companies own best view scenarios would be expressed in the common framework/building blocks of the GB FES to allow stakeholders to understand and compare scenarios. The GB FES would be produced as well as TO and DNO FES when required by the relevant network companies and their stakeholders. Process for T&D FES Co-ordination For sub-product 5.3, key areas of FES co-ordination were identified including: Starting Point agreeing the levels of existing demand, generation and other DER to be used in the FES. Building Blocks agreeing the different building blocks to cover requirements for both national and regional scenarios. 37

39 Stakeholder Interactions agreeing efficient interactions with stakeholders and ensuring the information provided by specific stakeholders is used effectively. Regional Apportionment taking account of regional drivers to provide a more considered position on local levels of demand, generation & DER. The Hybrid FES approach will leave network companies free to decide what scenarios to use and when to produce and publish these. They would produce scenarios relevant to their regions and wouldn t be bound to the high level scenarios identified for the GB FES. DNOs and TOs wouldn t follow a prescribed timescale for FES and would not necessarily publish FES annually. Further discussion of how the Whole System FES framework would be implemented through 2019 and 2010 is included in the following section Implementation Plan. 38

40 9. Implementation Plan Work to implement the Whole System FES proposed here would continue into 2019 and This will be supported by a specific Open Networks product under the 2019 Planning and Forecasting workstream. At this stage it is anticipated that 2019 FES would include tactical improvements to regional assessment. Figure 7 illustrates the main areas of work anticipated through Figure 7. Main areas of further Whole System FES Work through 2019 and In summary, the main areas for 2019 are: Improved liaison on the identifying and agreeing the electricity transmission and distribution elements would take place during Q1 and Q Information exchanges process for future Whole System FES would be agreed. Recognising the need to extend the whole system co-ordination beyond electricity, work is proposed to agree how interactions with other vectors should be handled. In 2019, it is also proposed to establish how governance of the Whole System FES framework should be maintained going forward. Building on the 2019 work, the 2020 FES would be first year of Whole Electricity System approach with agreed processes and data exchange. 39