Developing Local Flexibility Markets: Past, Present and Future

1. Developing Local Flexibility Markets – Past, Present, Future Evangelos Karagiannis Energy Markets, UKPN Smart Grid Development
2. 2 About UK Power Networks Measure Data % of industry End customers 8.3m 28% Population served c.20m ‐ New metered connections* 46,000 32% Distributed generation connected 9.4GW 31% Connected Electric Vehicles 86,000 33% ED1 totex allowance (2012/13 prices) £6,029m 25% Energy distributed 84.8TWh 28% Peak demand 16GW N/A Three distribution networks: • London • East of England • South East of England * Average per annum 2010/11-2014/15 Our vision is informed by our employees, consumers and wider stakeholders Delivering our vision
3. Energy Networks Association From Defining a DSO... to becoming one 2018 Flexibility Roadmap – Flexibility First approach 2017 Future Smart – our transition to DSO Flexibility Markets 2023 Contracted 45.1MW of cumulative capacity 2019 Tenders 28 Zones published
4. Our Flexibility Roadmap Principles Improve accessibility • Co-design new arrangements • Adoption of digital platforms • Contribute to standardisation Market testing • Open all LR capex at high voltage • Trials for EV-driven constraints Neutrality • Publish info on size & location ahead of tenders • Publish tender framework, assessment criteria, tender results Maximise available opportunities using economic principles
5. Brandon Leighton Buzzard Romney Warren Lewes Newhaven • 28 Zones Tendered • 4 Met Operational Needs • 7 with Smaller Volumes • Aberdeen Place • Lithos • Merton • North Drive • Reed • St. Helier • Wingham • 45.1MW cumulative (19.3MW unique) • Full bid info published Using Flexibility to operate the network Flexibility: 2019 Tenders
6. April 2020 Tender - Extending the Reach Across areas & voltage £27m In total Up to 7 year contracts We’re testing longer duration contracts 170MW Capacity Requirement 55 HV network zones Serving c.10% of our customers 60 LV zones DNO first Next steps • Bidding closed on 7 May • Competition results on 3 June • Contracts signed by 19 June
7. What Services We’re Procuring Sustain Reduce peak load on LV substations Location specific requirement Single fixed service fee Minimum 10kW (aggregated) Month-ahead commitment Secure Reduce peak load on HV substations Location specific requirement Availability/utilisation payments Minimum 50kW (aggregated) >6 month-ahead commitment Dynamic Reduce peak load on HV and LV substations Location specific requirement Utilisation payments Optional Service Provision
8. Our Unique Selling Points (USPs) Competitive Price Offer Defined Revenue Streams 1-7 year contracts Open to new and existing providers Stackable with other non- DSO services New DSO Markets, New Revenue Opportunities
9. Shift – EV Smart Charging Market Trials To investigate how DNO can support the market to manage smart charging Flexibility Procurement 24h Customer demand (kW) Capacity Based Pricing DUoS Time of Use Market trials: 2019-20 > Interim solution: 2021-23 > Industry wide solutions: 2023+
10. Power Potential – Solutions for the Whole System A reactive power market to resolve transmission constraints Growing portfolio of opportunities for Distributed Energy Resources Energy Exchange – Facilitating the long term growth of renewables Trading of generation curtailment Market trials: 2019-20 > Interim solution: 2021-23 > Industry wide solutions: 2023+
11. Conclusions •Flexibility is already BAU to operate distribution system •Growing the opportunities for providers •New solutions to future problems > Find out more at smartgrid.ukpowernetworks.co.uk < Email Evangelos.Karagiannis@ukpowernetworks.co.uk flexibility@ukpowernetworks.co.uk