Flexibility and smart energy management is crucial for the UK’s national electricity grid and the nationwide network of Distribution Network Operators (DNOs) to optimise operations, reduce costs and boost decarbonisation. Creating a more flexible utility market using digitalisation, new technologies and demonstration projects is important for bringing together new and established market partners and customers on the road to net zero.

‘The move from being a DNO to becoming a Distribution System Operator (DSO) means going from maintaining and operating assets in a traditional way to using data more effectively to balance the networks,’ explains Richard Hartshorn, EV Readiness Manager of Scottish and Southern Electricity Networks (SSEN).

SSEN is responsible for electricity distribution to over 3.8mn homes and businesses across central-southern England and the north of Scotland, where SSEN also runs the transmission network. ‘As a network operator, we have traditionally been charged with ensuring that the cables and transformers are suitably sized, maintained and periodically replaced. However, as we move to become a DSO, we will be responsible for ensuring the network is balanced,’ he says.

There are many new factors to consider with the move towards decarbonisation, the growing use of electric vehicles (EVs), heat pumps, solar, wind and new nuclear resources, in line with the UK government’s new energy strategy.

Finding balance
SSEN and other DNOs have embarked on a series of demonstrator projects, to ensure that supply and demand can be managed and balanced at a local distribution network level. ‘Part of that picture will be to ensure a “handshake” can take place between the DSO and National Grid so the whole system can take effect,’ explains Hartshorn.

The DNOs will also be working with aggregators who offer services at a very local level. For instance, they will work with a local aggregator so a group of customers with EV chargers can sell excess capacity to the network, to help lower peak demand. To achieve this level of demand flexibility, new communications will have to be set up, and customers encouraged to sign up with an aggregator via their supplier, for example, with the promise of an attractive tariff for night charging.

EVs and heat pumps are inherently power-hungry devices. ‘We could end up doubling demand on the electricity networks simply from EV charging. Traditionally, we built homes to allow an element of diversity in the use of appliances. We rarely find enough contingency built in for future demand, and EV charging threatens to remove that diversity when attractive tariffs are in place,’ says Hartshorn.

That presents a problem because many DNOs have built-in networks – with homes typically drawing 2 kW maximum demand, while an EV charger can draw 7 kW. However, every problem offers an opportunity. Hence the demonstrator projects the DNOs are running to show how smart systems can help manage some of these challenges.

Demonstrator projects
One of the most ambitious projects is Project LEO, which stands for Local Energy Oxfordshire. This £40mn project started in 2019 for completion in 2023. It involves SSEN, the Low Carbon Hub, University of Oxford, Oxford City Council, Oxfordshire County Council, Oxford Brookes University, Piclo, Nuvve, EDF and Origami Energy. LEO covers about 90 low carbon energy projects that are demonstrating the feasibility of certain smart operations, including flexibility trading.

The Crowdflex project, which ended in March 2022, investigated how domestic flexibility could reduce the proportion of a household’s demand consumed at peak by 15–23%. Parties involved include SSEN, National Grid ESO, Octopus Energy and Ohme.

Project ReHeat in Scotland is exploring flexibility and decarbonised heating systems interfaced with a smart grid in 150 homes. This project involves SSEN, SP Energy Networks, E.ON, the Scottish government and Sunamp.

‘The transition to business as usual (BAU) often takes a lot of steps,’ remarks Hartshorn. A decade ago he was involved in My Electric Avenue, which studied several hundred EV drivers to see what ‘unmanaged EV charging’ looked like on a network, compared with smart charging. This project wrapped up in 2015 and informed the 2018 Automated and Electric Vehicles Act and led to the UK government’s Smart Charging legislation.

The Optimise Prime project looks at how commercial fleets can transition to EVs. Partners include SSEN, UK Power Networks (another DNO), Hitachi, and fleet operators Royal Mail, Centrica and Uber. The project is due to finish in February 2023 and involves over 4,000 fleet vehicles.

SSEN is also working with Nuvve, a specialist in bi-directional EV charging to demonstrate the value for customers of putting power back into the grid.

Distribution future energy scenarios
To help energy stakeholders plan ahead, National Grid has developed four future UK low carbon scenarios. Three scenarios expect the UK to achieve the net zero target date of 2050 and one fails. Based on these options, the DNOs have created localised versions which are called Distribution Future Energy Scenarios (DFES), covering five-year periods, which are presented to the industry regulator Ofgem to identify areas in need of investment.

SSEN has been modelling various low carbon technology scenarios. From this data SSEN has built a tool to identify potential constraints on the network based on the volumes of EV chargers and heat pumps likely to be acquired, as well as the impact of government policies and market changes.

SSEN’s digital strategy is aligned for the next five years to the ‘Consumer Transformation’ scenario. ‘This is the second most ambitious DFES,’ explains Hartshorn. In this scenario a typical homeowner will have electrified their heating using an electric heat pump and run an EV. Most of their electricity will be smart controlled to provide high energy efficiency and flexibility. Apparently, SSEN’s digital strategy is leveraging lessons from the banking and insurance sectors ‘because they have made open data and flow of data seamless’, he adds.

SSEN has submitted its business plan to Ofgem for the next regulatory price control period, setting out plans to invest £4bn in its network from 2023–2028, in order to provide a safe and reliable supply of electricity for customers today and to ready the UK electricity network for net zero. The DNO already has a number of initiatives underway, aiming to build an effective system without over-sizing or over-spending, to meet future needs up to 2050. The use of ‘flexibility first’ to optimise network capacity will be central to supporting that.

‘The rate of change in the energy industry is unprecedented and there are many unknowns in the evolving technology mix, emerging business models and rate of customer adoption.’ – Richard Hartshorn, EV Readiness Manager, SSEN

‘SSEN’s responsibility is to prepare for all plausible scenarios and act as a neutral market facilitator to enable technologies to compete on a level playing field,’ says Hartshorn.

New players on the horizon
Currently, there are several DNOs in the UK, but are we going to see an explosion of new players?

‘Maybe at the aggregator level,’ says Hartshorn. ‘We’ve seen the unfortunate situation in the supply market where there was an explosion of suppliers that collapsed due to a “black swan” as gas prices became phenomenally highly priced, and small companies didn’t have the reserves to fall back on. However, I think that the flexibility market where aggregators sit will become huge. You can already see different offerings being made for the bundling of services. I expect the flex markets and aggregators will end up operating in a similar way to the apps market.’

Western Power Distribution learnings
Western Power Distribution (WPD) is the electricity distribution network operator for the Midlands, South Wales and the south-west of England. From 2016–2019 WPD delivered a £5.9mn project called Electric Nation to determine what localised clustering of demand by EVs is likely to cause challenges for electricity networks, building on the My Electric Avenue (MEA) project. MEA showed that about 30% of UK low voltage networks will need reinforcement by 2050 if the adoption of electrified transport becomes widespread.

There were several learnings, explains Paul Jewell, System Development Manager, WPD. ‘We measured and monitored about 700 EV users. First, people don’t charge every night but only when their cars need recharging. Second, people don’t come home from work, plug in their cars and charge straight away. That debunked some of the biggest concerns we had about domestic EVs – that everybody coming home from work would plug in their cars and cook, shower or whatever to create peak demand on the network.’

‘We also noticed that if you gave your customers even a very modest price signal, people will change their charging habits. As we’re not a supplier, our price signal was Amazon vouchers, and people responded by charging their cars at night as it was cheaper. We want suppliers to create inbuilt electric tariff flexibility (away from the early evening peak) so people won’t charge when our network is busiest.’

The key issue for DNOs is running ‘flexible power’.

Flexible Power is a joint initiative created by the Western Power Distribution Innovation project in 2017 and now involving five DNOs (with the exception of UK Power Networks) who are able to offer a single point of information about flexible service requirements. Flexible Power allows the network operator to avoid hitting capacity limits, as opposed to using conventional reinforcement.

‘For some capacity issues, it might be that the capacity is only reached during a small part of each day or a specific time of the year,’ explains Jewell. ‘Where this is the case, it can often be a more efficient and economical solution for us to contract with customers who can shift their demands to move load away from the network when we have limited capacity. For short-term or specific time-based restrictions, this can be cheaper than conventional reinforcement, and can also be used as a first response whilst we learn how load is growing or plan a more strategic reinforcement scheme.’

‘Flexible Power offers a business as usual (BAU) approach to flexibility to five network operators, regardless of geography.’ – Paul Jewell, System Development Manager, Western Power Distribution

Re-cabling issues
Finally, is there a need to re-cable the UK because of the new domestic and industrial demands on the road to net zero?

Jewell thinks there is enough capacity for most of what’s needed, using flexible power to change the load profile at times where the network is going to hit its peaks. ‘But for local networks running down domestic streets we are putting bigger cables in the ground,’ he says.

‘We used to have small, medium and large cables. Before the 2015–2023 Ofgem price review, WPD installed all sizes. Since 2015, we have got rid of the small size. From 2023 onwards, we’re getting rid of the medium size cables and will always put big cable in the ground. The cost of excavating a trench is the majority of the installation costs, so it makes sense to lay a big cable when a trench is open. We lay a network that will still be working hard long after full UK decarbonisation in 2050. I follow the spirit of Brunel and tell people – if you dig a trench, put something big in the ground for the network of the future.’