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The future of flexibility: tomorrow's smart grid is almost here

David Smith, CEO of the Energy Networks Association explains the Open Networks Project and how increased flexibility will benefit business.

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Businesses are reaping the benefits of an energy network that is becoming increasingly decentralised, decarbonised and digitalised. Huge advancements in digital technology, particularly data capture and analysis, are already allowing the networks to identify and address supply and demand issues.

This is enabling our customers to use their  energy assets flexibly  to reduce costs, improve resilience and sustainability, and generate revenue from Demand Side Response.

Centrica Business Solutions is participating in The Energy Network Association's  Open Networks Project to help develop the 'internet of energy' - that will have the power to unlock the full potential of energy flexibility. This will enable organisations to move towards a real-time fully flexed energy system that keeps the decarbonised grid balanced.

The Chief Executive of the Energy Networks Association, David Smith, explains what the Open Networks Project is and how increased flexibility will benefit our customers:

The increasing uptake in low-carbon technology means that we need to change the very foundations of our energy network so it is ready to deliver the energy we will all rely upon in the future. The Open Networks project is facilitating the change from Distribution Network Operators (DNOs) to Distribution System Operators (DSOs), to enable this transition. It is also opening up the networks to new technologies to effectively prepare to deliver a modern Internet of Energy.

Throughout this project, we’ve constantly been consulting the industry to ensure that we have the right approach, and that the benefits of the smart grid reach all customers.

Flexibility Commitment

As we look to transition networks from DNO to DSO, the Energy Network Association's Flexibility Commitment, signed by all six DNOs, ensures the networks are creating a smarter, more flexible, and more efficient energy system by expediting the growth of flexibility markets.

Networks are now testing the market to compare the cost of 3rd party flexibility services against that of more traditional energy infrastructure, when addressing constraints that arise on the network.

Working with Ofgem, the Department for Business, Energy, and Industrial Strategy (BEIS), and other stakeholders, the networks are feeding into the upcoming RIIO-2 framework to ensure that regulatory barriers are broken down, and there is a real incentive to use flexibility services. The flexibility Commitment facilitates the use of these services, and will ultimately allow the networks to replace or supplement traditional network investment, such as upgrades or reinforcements, with potentially more cost effective solutions.

The Flexibility Commitment will help create new routes to market for services provided by smart energy technologies, allowing networks to use previously untapped and growing resources when addressing constraints on the network.

Innovation in action

One of the most exciting things about the Open Networks Project is the constant innovation the networks are undertaking to find solutions to new problems that arise from the introduction of new low-carbon technology onto the grid.

Trials for programmes and products are already being undertaken across the sector to get a much clearer picture of how flexibility can be used to improve services to customers, and in some cases, customers are already seeing the benefits. The Open Networks Project is supporting all stakeholders in their trials for flexibility services, to make these types of trials standardised across the UK, as well as defining roles and responsibilities.

Programmes such as Centrica’s Cornwall Local Energy Market is a prime example of how the market is already starting to decarbonise the networks and create the local markets necessary to facilitate the change towards a decentralised energy network. Cornwall has one of the most dynamic energy landscapes in the UK. The significant amounts of renewable energy and its rural setting provides a great test location for new technologies.

Markets for some flexibility services already exist at the national level, but are still in their infancy regionally. The Cornwall Local Energy Market, and the £700 million Centrica plans to invest by 2020, shows that throughout this transition, companies and networks are being proactive and constantly innovating to find solutions that never existed before. The joined up thinking displayed by the Cornwall LEM scheme (working with DNO Western Power Distribution (WPD), academics at the University of Exeter, and the National Grid (ESO)) demonstrate the kind of approach that is needed to deliver one of the most ambitious projects undertaken by the industry.

Future energy worlds

Recently, we released an Impact Assessment Report on five Future Worlds of energy, which the Energy Network Association showcased and consulted on in 2018. The Impact Assessment and consultation looks to build an evidence base to help shape the direction towards a de-centralised, de-carbonised, and digitised energy network.

Produced by global consultancy Baringa, the report has given us a steer towards Future World B – a world where the DSOs and ESO work together to efficiently manage networks through co-ordinated procurement and dispatch of flexibility resources. This ‘option of least regrets’ allows for rapid innovation in a cost effective way by providing a starting platform that is a logical next step to the energy landscape of today.

The introduction of flexibility markets will increase competition and maximise the benefits the Internet of Energy will bring. However, it’s important for both networks and stakeholders to be proactive in this transition in identifying key areas of the system that can be upgraded now; short term work towards the long term goal of a more integrated, flexible, and dynamic energy system.

How Centrica Business Solutions can help

Centrica Business Solutions' AI is already enabling our customers to maximise value from their flexibility.  As Europe's number one Demand Side Response provider, our advanced software automatically visualises and monitors real-time flexibility and then manages and steers demand response actions. This maximises cost savings and revenue generation.