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The Voice of the Networks Energy Networks Association TSO-DSO Project Forward Plan for Work

TSO-DSO Project Introduction In December Energy Networks Futures Group & ENA Board (Business Leaders) gave their commitment to a long-term project to be led by ENA to progress the transition of DNOs to DSOs, provide clarity to the interface between DSOs & TSOs and improve the customer experience. First Phase to deliver in 2017 Expect Second Phase in 2018 and then beyond to ED2/T2 Phase 1 Phase 2 Phase 3 Phase 4 End 2017 Definition of T-D Processes, Customer Experience, DNO to DSO Transition & Charging Impact Assessment of Options and Preferred Design Regulatory Enactment Design, Build and Test 2 The Voice of the Networks

TSO-DSO Project Objectives The objectives of the TSO-DSO Project for the first phase of work in 2017 are to: 1. Develop improved T-D processes around connections, planning, shared TSO/DSO services and operation 2. Assess the gaps between the experience our customers currently receive and what they would like and identify any further changes to close the gaps within the context of level playing field and common T & D approach 3. Develop a more detailed view of the required transition from DNO to DSO including the impacts on existing organisation capability 4. Consider the charging requirements of enduring electricity transmission/distribution systems 3 The Voice of the Networks

Governance and Hierarchy ENA Board ENFG TSO-DSO Project Advisory Group inform advise New TSO-DSO Programme Steering inform ERG COG Workstream 1: T-D Process Workstream 2: Customer Experience Workstream 3: DNO to DSO Transition Workstream 4: Charging 4 The Voice of the Networks

TDI WG to TSO DSO Project Statement of Works HV 1. T-D Process 2. Customer Experience Shared Services Working Group ENA Transmission and Distribution Interface Steering Group Active Network Management Group TSO-DSO Project Charging Task Group 3. DNO to DSO Transition 4. Charging 5 The Voice of the Networks

Project Workstreams Workstreams 1. T-D Process 2. Customer Experience 3. DSO Transition 4. Charging Stakeholder Engagement / Transparency / Programme Management Regulatory and Policy Considerations inc. EU packages Commercial Considerations Smart Grid Forum WS6 Actions and Outcomes 6 The Voice of the Networks

Proposed Development and Workstream (WS) structure Products WS1 Products WS2 Products WS3 Products WS4 1 2 3 4 5 Member Chair + Member Representatives 1 2 3 4 5 6 SME3 SME3 SME3 SME3 Member Chair + Member Representatives 1 2 3 4 Member Chair Member Representatives 1 2 3 Member Chair Member Representatives 6 7 5 x The Work Stream Group will steer the development of the products The Work Stream Member Chairs should sit on the steering group Member representatives can also be SME s for particular products 7 The Voice of the Networks

Workstream 1: T-D Process Scope Investment Planning processes (processes that result in either capital or opex investment decisions for network businesses) Operational Planning processes (capturing operational planning, real time, balancing and settlement) Develop whole system investment and operational Planning Processes/models Review development of ancillary services across GB Develop approach for the co-ordination of transmission and distribution constraints in an operational timeframe Develop whole system commercial agreements for Active Network Management with distributed generators Review and update SoW to take into account TSO DSO project scope and developments 8 The Voice of the Networks

Workstream 2: Customer Experience Scope Customer Journey Maps for Connections & Service Provision Short Term Improvements make early improvements to processes for connection and service provision. Updated Connection Arrangements - Agree and implement changes to network access arrangements (Bilateral Connection Agreements) for DER. Explain the different connection offers available to customers and the impact that these can have on them Service Provision Improvements Customer Journey Maps for Changes to Legacy Arrangements Emergency Events Customer Journey Maps Customer Information Requirements improvements to the information that is provided to support network access and service provision. Ensure that agreed improvements to customer experience are taken forward in other workstreams. Complete ongoing work to improve Statement of Works process. 9 The Voice of the Networks

Workstream 3: DNO to DSO Transition Scope 1. DSO Transition Roadmap - a roadmap to deliver transition to DSO in the short, medium and long term 2. DSO Functional Requirements 3. Model for DSO - model for DSO with some options set out for governance models which will allocate DSO functions to system roles and responsibilities 4. DSO Market Model Options Comparison & Evaluation - an assessment of the risks/benefits for power system users, customers and industry participants 5. Trials to Support DSO Definition if necessary definition and initiation of trials to test different market models and/or any gaps in the existing evidence base to support decisions to define market models (across different regions and Network Operators) 10 The Voice of the Networks

Workstream 4: Charging Scope Short-term by June 2017 1. Identify problems caused for customers through the interaction of current charging arrangements across Transmission and Distribution on customers 2. Capture the root causes of these problems. 3. Establish the level of commonality that might be required to resolve identified root causes and deliver project and workstream objectives/goals. 4. Develop recommendations including - overview of current industry charging reviews, proposals to solve issues identified, implications to existing arrangements and steps needed to implement, recommendations for a charging framework (focused on connection and Use of System charging), identification of quick wins. Medium-term by December 2017 5. Recommendations to Ofgem : Smart tariffs, flexible connection services, ancillary services pricing; identify requirement for (cross sector/industry) working groups to progress longterm deliverables. Long-term Products potentially 2018-2020 6. Strategic Review Whole System Pricing 7. Consider proposals to change the governance around changes to the methodologies 11 The Voice of the Networks

Breakout Session Whilst welcoming feedback on any aspect of this project, we would particularly like your feedback on the following: What s important for you for planning the future of T D interface and DSO? Do we have the right focus in this project? Is there anything missing? What involvement do you want? What stakeholders should be invited participate in the advisory group? Do you have a preference on how you are kept up to date with progress? E.g. via workshops, newsletters etc. 12 The Voice of the Networks