geo s response to ENA s Future Worlds consultation

Transcription

1 geo s response to ENA s Future Worlds consultation 2.6 Future Worlds 1. We have set out five potential Future Worlds. Do you believe these provide a reasonable spread of potential futures? The analysis seems narrow as worlds A,B,D&E are broadly similar, with the only difference being who the neutral market facilitator is. The analysis is system operator centric. The principal beneficiaries would be system operators, as they are the ones in need of flexibility services to deliver their overall system at lowest cost, so the rationale is understood. However, further analysis considering the active participant or local energy system having a larger role in the system would be interesting, where localised grid monitoring is digitised, as is balancing of the grid to dispersed demand management. 2. Are there other areas of potential Future Worlds you would like us to consider to inform our thinking? Alongside the dispatch mechanisms, significant thought must be given to how balancing and settlement in a dispersed digitised world will be achieved. Moving towards a digitised, decentralised ledger would be least cost model in the long run. Innovation to move towards a wholistic decentralised ledger model would benefit the longterm viability of the network. What are the business cases for each of the worlds? Which world represents best value? What if the role of dispatch and settlement was separated between actors in the system? Pathway(s) towards automation of these roles should be envisioned. 3. Do you have any key concerns with any of the Future Worlds we have set out? We believe World B is most closely aligned to current state of play and will likely be the default going forwards, but action should be taken to move towards a world C elements. Slight concerns around the neutrality of system operators having responsibility for charging, dispatch and settlement.

2 3.6 SGAM 4. Is there anything missing from the SGAM methodology that has been implemented? Not clear where low power domestic flexibility assets fit on the model. There seems to be a gap though where geo play, somewhere between aggregated active participants, or small scale, dispersed but aggregated local energy assets. Maybe these are covered off between local energy schemes, active participants and SSP 5. How can SGAM modelling be used in further work to extract maximum value? Need a better form of comparing worlds. It was carried out to enable comparison, but the only way to compare is by combing through the different models in parallel. A summary of differences between the SGAM models would be highly beneficial to digest the differences. Due to the similarity of the worlds, it is possible a high level of duplication has occurred, but this is hard to uncover amidst the complex arrangements. The purpose of transitioning to DSOs using the model is valid. 6. What are the limitations of using the SGAM modelling for informing the Impact Assessment? Apologies if this is an uninformed opinion, but from my understanding the model focuses on larger C&I assets for flexibility. I would be interested to see a further SGAM structure that explores dispersed domestic assets throughout the network. The model has a natural bias towards those worlds facilitated by ESO/DSO. Remodelling from some other start points, e.g. local energy services, or active participants, or a decentralised digitised system would provide an interesting analysis 4.4 Neutral market facilitation 7. How do you believe neutral market facilitation for SOs can be achieved? The 5 worlds present 5 views on how this could be achieved, each are viable. Most simply, a third party facilitator would have most transparency and neutrality, although could easily become entwined in complex processes. If appropriate market stimulation can be nudged, maybe a third party is still needed, but one who nudges using pricing and incentives, rather than who restricts with legislation. Extensive work for this third party would be monitoring undesirable loopholes being inappropriately exploited. By making their role non-commercial risks high levels of inefficiency and poor delivery. Why not create a competitive market to provide the facilitator role?

3 8. What are the possible conflicts of interest that SOs need to be aware of when facilitating the market? Carbon intensity vs cost vs maintenance of supply what are the hierarchy of metrics that the facilitator performance will be judged on. This will dictate how the market is facilitated/optimised. Preferential operation of owned assets. Extensive lobbying by power providers / government to artificially create demand to keep costly power stations in business. 9. What additional requirements would be appropriate to ensure the neutrality of SOs in facilitating the market 5. Stakeholder insights 10. Which SGAM actor(s) best describes your future role(s)? As a tech provider enabling active participants, we sit between a few: Active Participant System Service Providers Dispersed Energy Resource (less so) Local Energy Scheme (less so) Aggregator (in-home) 11. Do you have any thoughts on the insights gained on this role(s) in each of the Worlds? Distributed Energy Resource (System Service Providers): Access to the wholesale electricity market would be a great starting point. This is currently only available to retailers with retail license. Agree. SSPs could provide to ESO/DSO s although more likely would utilise aggregators who have access to and management of the exact flexibility service. Contracts useful to justify future revenue, although a pay-as-you-use type model could be easily established where automated systems are available. Why does contracted offers needed to SO s? there is a need to issue availability contracts to a dispatcher, but the dispatcher could be different entity to the SO s. Agree, there is little difference between the worlds, other than World C, save for the party contracting with, if outside of a commercial aggregator.

4 12. Do you have any comments on the insights drawn on any of the other roles described? Aggregator Agree. Consideration should be given to the opportunities arising from a ramp in demand and decentralisation of generation. Price based flexibility might reduce contracted flexibility, but overall flexibility would remain a regular feature. There would be more risk in building large flexible assets. Re: World B, Little value stacking is currently allowed, having a stack of two ESO/DSO services wouldn t change operation significantly. Even if ESO ran the world, they d still be obliged to tender for localised flexibility services. Customers (passive with auto-active system): Auto-active systems could be installed in social or landlord properties, providing lower cost energy to tenants and additional revenues to landlord from flexibility trading. They remain passive, but the system is active on their behalf. Truly passive customers could have tech imposed upon them to ensure they don t lag behind. If proactively passive, should the country bear the cost of their expensive use of energy?! Customers (active): agree with this profile. (What is meant by an Independent Connection Provider? Maybe this is where geo s Hybrid Home tech fits.) Could also opt in to flexibility services through their smart home coordinator having the relationship with aggregators/flexibility coordinator/supplier/so. Agree, World C provides most interesting future for auto-active customers. Price caps will likely protect proactively-passive customers. Agree, the other worlds are irrelevant as the channel remains common. It s unlikely, due to the scale and dispersed nature that individual customers would have direct relationships with DSO/ESO s. Local Energy System (DER or Active Customer): Agree. 13. If you do not feel represented by any of the actors, how do you believe we should capture your role? Active home provider / Smart home coordinator We sell the tech and supporting system architecture that brings together active appliances/chargers, making one connection point to the aggregator. This groups the benefits for the household and the flexibility for aggregators. In a sort, we provide in-home aggregation services, and the user-friendly interface for active participants to set their preferences. We aim to automate the active participant, in accordance with their preferences and behaviours, such that the household can be largely passive, but benefit from appearing as an automated active participant on the market. Since solar and storage is integrated into the system, the home also provides a dispersed energy resource, and can be aggregated into local energy schemes. Likely Smart System Provider best fits, however we provide millions of low-power, dispersed smart systems, with micro-computing at the grid edge, enabling high-resolution, automated management of grid stability. This enables more smart systems to be used as part of a DSR market, as they only need to interface with our in-home API to drive the automatic operation.

5 6.7 Assessing the worlds 14. Do you agree with the proposed approach and timescales for delivering the assessment? Are there any improvements you would suggest? Seem plausible, however little commitment over action from the work, therefore high level of uncertainty that any meaningful market or policy change will be enacted. Would like an BEIS/Ofgem roadmap of when they will take action on the recommendations, and when firm policy will be established. Even policies as far out as the 2040 curtailment of combustion new vehicles is having a massive catalysing effect on the reimagining of the automotive industry. Having a similar clear policy and legal-binding goal of when all coal and non CCS gas plants will cease, alongside clear roadmap to flexibility, will stimulate the market to meet these requirements. Currently the hedged language is stifling significant innovation and adoption of new energy ecosystems. 15. 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? Enhanced customer experience: Additionally, elements of convenience/simplicity or improvements to wellbeing Greater environmental sustainability: Less system loss is the main form of energy efficiency that each system will advocate for. The current level of detail of each worlds I don t think prescribes how energy efficiency in the end use will be encouraged or discouraged, so the first and fourth assessment vectors should be amalgamated. Financial benefits: Suggest assessing how wide spread are the benefits Whole system optimisation: Like these, but since the worlds are largely similar, this analysis will likely bear little interesting differences between the opportunity for whole system optimisation. Viability: Key to be assessed in this element is how much value can be derived by those needing to invest or suffer significant disruption to their way of work/life. Is industry ready to deliver? What barriers are there? 16. Is there any data you could provide or suggest we collect to support the assessment? We re planning a trial (subject to BEIS funding) due to start before Christmas that will look at setting up a future world and managing some homes within that new derogated market context. This should throw up some very interesting data. 17. Do you believe that there are any tensions between different criteria and if so how should priority be built into the assessment? Likely constraints between environmental and economic cases. What is the main driver for the new energy network? Low carbon or more economic or security of supply? Security based on political stability or weather predictability

6 7.5 Key enablers for the future 18. Are there more key enablers that we should be considering? Consumer interest / demand / pull Legally binding policy / climate change commitments 19. Do you agree with our short-term investment priorities? Broadly agree. Making data open and available will stimulate desired innovation. 20. Considering the different DSO model Worlds that Workstream 3 has considered, do you think the key enablers differ materially between the Future Worlds? World C and E offer the only significant variations. A, B and D will all proceed largely similarly. Consideration as to how a price structure (C) is overlaid, and action towards establishing this, whichever party (or no party/automated party) is the facilitator would be welcomed. Clarity and visibility of this work would be welcome. 8.5 Proposed next steps 21. Do you agree with the proposed next steps? Broadly in agreement. Seem pragmatic and incremental whilst industry/government/regulator align on a common view that gives space for new energy futures. 22. Is there a specific activity within the functions that we have prioritised that you would like us to focus on for short-term delivery? Real-time network monitoring for thermal and voltage excursions (particularly for grid edge voltage monitoring, at little cost, utilising smart meter infrastructure) Regulatory framework for flexibility service provision Flexibility compliance to activation/dispatch signals. Activation of flexibilities and smart grid solutions Assess requirements for flexibility services Procure and activate flexibility Conflict mitigation and resolution. Development of smart grid solutions. Exchange of information to determine market charges Access charges for flexibility resources.