The Energy Networks Association 4 More London Riverside LONDON SE1 2AU

Transcription

1 National Grid ESO Faraday House, Gallows Hill Warwick, CV34 6DA The Energy Networks Association 4 More London Riverside LONDON SE1 2AU Julian.Leslie@nationalgrid.com Dear Farina National Grid ESO response to the Open Networks Future Worlds consultation Thankyou for the opportunity to respond to the Open Networks Future Worlds consultation. This response is provided on behalf of National Grid in its role as Electricity System Operator (ESO). In this role we are an active participant in the ENA Open Networks project, including having led the development and delivery of this consultation document. As such we are strongly supportive of both the aims of the Open Networks project and also the work that has been undertaken to develop the Future Worlds consultation and associated material. The energy landscape is changing and industry roles and responsibilities need to evolve to facilitate this transformation. Earlier this summer we published our Facilitating Whole Electricity System Outcomes paper 1. This paper describes the benefits of taking a whole system approach to the transforming energy landscape and how the ESO role is evolving in response. We see this paper, and our work on Whole Electricity System, as complimentary to the work of Open Networks and want it to further inform this debate. Such discussions are important to inform our future role as a standalone ESO which will support the development of robust business plans for RIIO-2 that deliver value for the consumer. We respond to the specific questions raised in this consultation in the attached annex. Our responses focus on points that are not explicitly made in the consultation document. We are also raising these matters through our ongoing discussions as part of the Open Networks project but feel it is important raise awareness of such areas of potential interest with all stakeholders. Indeed some of these areas have been raised by stakeholders through the consultation process and we strongly believe that the Open Networks project needs to consider views from a wide range of stakeholders. More broadly we would also like to raise awareness of our upcoming works on Whole Electricity System including our updates to the 2018/21 ESO incentives to facilitate whole system outcomes, and an intended broader publication on how the ESO can help facilitate whole electricity system outcomes to inform our RIIO-2 business plans. We believe that these materials can be informed by, and add to, the discussions ongoing through the Open Networks project. If you would like to discuss any of the points raised in the consultation response please contact either myself or Andy Wainwright (andy.wainwright@nationalgrid.com). Yours sincerely, Julian Leslie Head of Networks, National Grid ESO 1 1

2 Annex Responses to specific questions asked in the Open Networks Future Worlds consultation Source Section 2: Future Worlds Questions We have set out five potential future worlds. Do you believe these provide a reasonable spread of potential futures? We believe that these worlds provide a reasonable spread and good starting point for discussion. However the worlds should not be viewed as binary and different DSO functions and activities may require different solutions leading to a hybrid future. Also these worlds should not necessarily be viewed as alternative end states as some could be incremental steps towards others. For example World B could be a step on the pathway towards World C. Are there other areas of potential future worlds you would like us to consider to inform our thinking? Further work could potentially be done on cross vector implications noting the current representation of gas and heat actors. Do you have any key concerns with any of the future worlds we have set out? There is a great range of scope within each of the worlds and further work will be required to bring out these sub-options to facilitate further industry discussion. Section 3: Smart Grid Architecture Model Is there anything missing from the SGAM methodology that have been implemented? The overall methodology would appear sound. There are a few areas worthy of future consideration; o Work continues to evolve the (D)SO functions following stakeholder feedback and this could mean models need to be updated o Communication links involving DNO/DSO and ESO actors have been captured but between other actors have not. There may be merit in including these also. o There could be merit in understanding communication requirements within actors. For example understanding the requirements within the DSO-DNO entity could inform business plans for RIIO-ED2, help identify least regrets analysis and inform the impact assessment. How can SGAM modelling be used in further work to extract maximum value? SGAM provides a structured means to record the world but other forms of assessment are required to bring out different 2

3 considerations. The impact assessment should go some way towards achieving this. What are the limitations of using the SGAM modelling for informing the Impact Assessment? The SGAM modelling holds the data for a broad range of worlds. However there are many subtleties that exist within each world that cannot be captured in the modelling at this time. This includes transactional volumes for example. Section 4: The Principle of Neutral Market Facilitation How do you believe neutral market facilitation for SOs can be achieved? Frameworks and licences need to be adapted to ensure parties that have system operator responsibilities are neutral in all relevant aspects. What are the possible conflicts of interest that SOs need to be aware of when facilitating the market? There should not be any conflicts of interest if the regime is established appropriately. What additional requirements would be appropriate to ensure the neutrality of SOs in facilitating the market? National Grid is already a neutral system operator in both gas and electricity sectors. The requirements on National Grid in these roles would provide a good starting point for other organisations looking to take on system operator responsibilities. Section 5: Stakeholder Insights Which SGAM actor(s) best describes your current future role(s)? We would be best described as the ESO actor. Do you have any thoughts on the insights gained on this role(s) in each of the Worlds? In this high level consultation it is a challenge to provide detailed insights. We would be interested to know if stakeholders would value deeper insights on the potential changes for the ESO and would welcome feedback as part of our ongoing discussions on RIIO-2 and the 19/21 incentives. Do you have any comments on the insights drawn on any of the other roles described? We would be interested in hearing the views of other stakeholders to inform our thinking. If you do not fee represented by any of the actors, how do you believe we should capture your role? 3

4 N/A Section 6: Assessing the worlds Do you agree with the proposed approach and timescales for delivering the assessment? Are there any improvements you would suggest? The impact assessment will be valued by a broad range of stakeholders. It is important that a transparent, inclusive approach is taken and that the views provided by stakeholders are considered. In terms of the following questions in this section, as an active member of the Open Networks project we have already provided our inputs into the impact assessment. However we would be happy to be part of a data sub-group. Do you agree with the proposed assessment criteria and allocation into cases? What further development would you suggest to the criteria (e.g. any additional criteria) or structure and content of the Impact Assessment? Is there any data you could provide or suggest we collect to support the assessment? Do you believe that there are any tensions between different criteria and if so how should priority be built into the assessment? Are there any functions / roles that need to be considered as a priority area for assessment? We are considering forming a sub-group to assist with the collation of data for the impact assessment; do you think this would be worthwhile and if so would you volunteer to be part of the sub-group? Section 7: Key enablers for the Future This is the list of key enablers that we have identified: - Regulatory changes - Organisational changes - Communications infrastructure - IT systems - Network visibility and control - Market engagement - Contract requirements - Funding Are there more key enablers that we should be considering? Currently the key enabler list seems very networks focused and further work could be done, with the broader stakeholder base, to understand the wider enablers needed to facilitate the evolution of the energy industry in a timely manner. Do you agree with our short-term investment priorities relating to the key enablers of: - communications, 4

5 - IT, and - network visibility & control? Priorities should be informed by feedback to this consultation and the related impact assessment. If it is believed that any investment is required in shorter timescales then this must be supported by a robust business plan, informed by stakeholder views, that clearly delivers value to the end consumer. Given our short-term priorities, what actions do you consider need to be taken now to address them? Please see answer to the previous question Considering the different DSO model worlds that Workstream 3 has considered, do you think the key enablers differ materially between the Future Worlds? The enablers could differ and hence it is advised that feedback to this consultation and the findings of the impact assessment are used to inform this thinking. Section 8: The proposed next steps Do you agree with the proposed next steps? We broadly agree with the intended next steps and recognise the need for further engagement with stakeholders following the impact assessment. We are mindful there is significant information stored in SGAM and it is critical that there is an appropriate level of peer review (including external stakeholder awareness) of least regrets activities before any are progressed. The Open Networks Project is prioritising areas of least regrets to deliver the benefits of a smart grid as soon as possible. Is there a specific activity within the functions that we have prioritised that you would like us to focus on for short-term delivery? We would expect that many of these activities are already underway, or may even be business as usual for some parties, through initiatives such as the Regional Development Programmes and other DNO developments. We would suggest that, as part of this exercise, any ongoing initiatives and relevant business as usual activities are considered to avoid duplication. These include any initiatives not directly involving ENA members. Is there any additional work that we need to undertake? In the context of the next steps from this consultation we believe listening to consultation responses is the appropriate way forward. We recognise that, more broadly, the Open Networks project is now considering its 2019 work programme and continue to remain a committed member. We expect that stakeholders will be increasingly interested in how these future worlds will be developed after the impact assessment. Noting the roles of BEIS and Ofgem as decision makers, this needs to be progressed in a timely manner to ensure that benefits to the consumer are maximised. 5

6 6