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Winning flexibility: Ofgem’s £57.5 million Network Innovation Competition awards

Projects supporting markets for flexibility have been endorsed by Ofgem within the regulator’s Electricity Network Innovation Competition (NIC).

Three of the five projects to win funding in ENIC all set out to grant distribution network operators (DNOs) greater access to flexibility, with Western Power Distribution (WPD), SP Energy Networks (SPEN) and Scottish & Southern Electricity Networks (SSEN) all winning big.

Those three DNOs scooped over £21 million between them to take forward proposals to demonstrate how DNOs can harness flexibility on their networks.

The Transition project from SSEN has won the lion’s share of the funding with up to £13.1 million to be used to design some of the tools needed to deliver market models being considered by the Energy Networks Association’s (ENA) Open Networks project.

It will seek to identify the data sharing requirements necessary to facilitate a market for flexibility services to resolve network constraints and release additional capacity in place of agreements between network licensees and ancillary flexibility services.

The project will be a collaboration between SSEN, Electricity North West, Northern Powergrid, Atkins CGI and Origami Energy and will generate knowledge to spread across all other DNOs, as well as participants in markets for flexibility.

This will feed into the ENA’s programme which seeks to take a whole systems approach between transmission and distribution system operators to help give households, businesses & networks the ability to take advantage of new energy technologies to take control of their energy and lower their costs.

If successful, Ofgem believes the types of market frameworks being trialled could save network customers as much as £292 million while reducing carbon emissions and releasing 0.5GW of network capacity if rolled out across Great Britain by 2050.

Meanwhile, SPEN’s Fusion project has been awarded up to £5.3 million to trial a market framework dubbed the Universal Smart Energy Framework. This project will trial commoditised local demand-side flexibility through a structured and competitive market-based framework, enabling the DNO and all market actors to unlock the value of local network flexibility.

SPEN estimates the GB roll-out of the USEF could provide net financial savings of £236 million to network customers by 2050 while potentially releasing additional capacity of 5.5GW from the existing network assets in the Project area in East Fife.

The third flexibility project to be awarded innovation funding is the Electricity Flexibility and Forecasting System (EFFS) from WPD. Using up to £2.9 million from Ofgem, it will develop and trial a load forecasting tool to identify long and short term need for flexibility services and where it may be possible to provide these services.

EFFS will create learning around the establishment of a new network interface tool, which will include algorithms to calculate improved network capacity forecasts in order to facilitate the procurement of flexibility.

This software will support the evolution of DSO roles by building capabilities to support the development of any models for accessing flexibility.

WPD, working with AMT-Sybex, EDF and National Grid on the project, predict the methods being trialled could release 630MVA of network capacity for LCTs while saving network customers £240 million through avoided network reinforcement by 2050, if rolled out across GB.

Active response and EV collaboration

In addition to these projects, which have been awarded conditional funding based on a number of conditional requirements set by Ofgem to ensure that, in part, they do not overlap on each other’s efforts, the regulator has also awarded another £21 million of confirmed funding to two other electricity network innovation projects.

UK Power Networks’ (UKPN) Active Response project has secured £13. Million to develop and trial advanced automation and power electronic devices that should reduce the amount of reinforcement needed to accommodate the uptake of low carbon technologies.

According to UKPN, the project is tilted particularly towards electric vehicles and will seek to use power electronics and automation to move electricity from heavily loaded substations to those nearby with spare capacity.

This could allow electricity companies across the UK to use these power sharing techniques to connect new customers, and those requesting more power, quicker and at lower cost, instead of upgrading an electricity substation, or adding entirely new substations and cabling when customers need more power.

UK Power Networks’ head of innovation Ian Cameron said: “A low carbon transport revolution is coming and UK Power Networks want to make sure electric vehicle users can charge when and where they want at the lowest possible cost. Active Response is one of our key projects to enable this, by allowing us to research how we can move any spare capacity around the network to where it is needed.”

UKPN, which will work with SPEN on the project, says the project could save customers nationwide £271 million by 2030.

The final project to win in the Ofgem competition is the LV Engine from SPEN, which will trial ‘Solid State Transformers’ (SSTs) on the network.

These are designed to provide a high level of flexible control to distribution networks, with the potential to provide direct current connections to networks customers, and have yet to have been deployed on the GB distribution network SPEN aims to use them to make better use of capacity within existing low voltage distribution networks to facilitate the increasing uptake of low carbon technologies.

Like all of the other projects to be awarded funding, LV Engine includes input from a second DNO with Ofgem seemingly favouring projects which incorporate a number of stakeholders and participants to ensure that learnings from each project are disseminated throughout the industry.

The need for this kind of collaboration was recently pointed to by the ENA, which recently implored energy sector stakeholders to engage and collaborate with network companies to release the multi-billion-pound potential of network innovation.