Event: Future Networks Birmingham, 15 March 2016

It’s the commercial and regulatory issues that present the biggest obstacles to the development of electricity and gas networks, according to speakers at Utility Week’s Future Networks Conference. Tom Grimwood was there.

As Britain’s networks undergo some of the most fundamental changes to the way they work since they were created, delegates at Utility Week’s Future Networks Conference in Birmingham, sponsored by Schneider Electric and Kelvatek, heard that the biggest obstacles to progress are not technical but commercial and regulatory.

“The technical bit is the easy bit,” said SSE Power Distribution (SSEPD) head of asset management and innovation Stewart Reid. The hard bit is “the commercial challenge” and making new developments part of “business as usual”.

Energy Networks Association head of engineering Kieran Coughlin agreed, saying that when it comes to something like demand-side response (DSR) “a lot of the technical challenges, while significant, are probably being addressed”. He said the focus needs to be on creating markets and putting the right regulatory frameworks in place.

Another example is storage, according National Grid’s director of system operation, Phil Sheppard. Although “battery prices have halved in six years” there are “some regulatory and commercial barriers to overcome”. More specifically, he said, there is a need for legal clarification because “a lack of a proper definition for storage is causing uncertainty for investors”.

Tim Rotheray, director of the Association for Decentralised Energy, said he saw an inevitable move towards a regulated environment for district heating, saying it would de-risk investment and create a level playing field for the sector.

He also called for financial incentives to be put in place to encourage co-operation between network operators so mutual benefits can be realised.

“If you could translate that value into something that could then be shared between the different systems, that would be really powerful,” he said.

Other highlights at this event included the announcement of a new research project by SSEPD looking at how electric vehicles (EVs) could be used to provide DSR for distribution networks. The aim is to come up with an engineering recommendation for a “common device” for local substations that can communicate with all different types of chargers.

Delegates also heard about SGN’s trial of new mixes of gas in Oban, SP Energy Network’s tests of dynamic thermal ratings for substations and UK Power Networks’ battery storage facility in Leighton Buzzard.

Northern Powergrid’s head of trading and innovation, Jim Cardwell, presented findings from the company’s research into how demand is affected by new technologies such as EVs and heat pumps, and Western Power Distribution innovation and low-carbon networks engineer Jonathan Berry explained how the company is finding new ways to squeeze more use out of existing capacity.

Barrie Cressey, director of smart grids at Schneider Electric, described how its new adaptive protection software, Respond, could find real-time solutions to network faults, while Jonathan Rodgers, future networks manager for Kelvatek, explained how technology was enabling the safe interconnection of multiple local distribution networks.

Meanwhile, the head of future electricity networks at the Department of Energy and Climate Change, David Capper, told delegates the department was hoping to say something later this year about moves to achieve greater independence for the system operator. “We work very well with Ofgem and National Grid. We have very productive conversations,” he said. “We just need to see where that work takes us.”

Decc head of future networks David Capper

“We’re not so sure having a brand new licence written in primary legislation that will take many years to do is the panacea to the problems storage developers see. But I think we’re sympathetic to some of the things they say about needing to define storage more clearly.”

National Grid director of system operation Phil Sheppard

“On transmission charges [for storage] we do have a role to play as National Grid and we are considering reform… This doesn’t necessarily mean getting rid of half the charges but it does mean a fair cost reflectivity for all technologies.”

Schneider Electric director of smart grids Barrie Cressey

“Electric vehicles… will change the shape of the usage of the network. Some say, in the future they will change into mobile storage devices, which we’ll have to forecast and predict. I think we’re some way away from that yet. I don’t think I’m going to see that in my working lifetime, and indeed my lifetime.”

SSEPD head of asset management and innovation Stewart Reid

“One of the dilemmas we’ve had with electric vehicles is that at the moment the only way you’ll know if you’ve got a cluster formed on a particular street is the fuse will blow. It isn’t entirely a smart solution.”

Association for Decentralised Energy director Tim Rotheray

“When you have a heat network, if you overdesign it, the water is circulating around a building and it just gets hotter and hotter. It’s not because people are being deliberately ineffective, it’s because we actually don’t know how we use heat.”

Northern Powergrid head of trading and innovation Jim Cardwell

“I think we’re moving to the next phase now [of the Low Carbon Networks Fund] which is all about coping with the volume of learning. I think the next phase is probably about starting to have some more projects that don’t go mining for new answers.”