DNO business plans show they mean to improve resilience and reliability for worst-served customers.
The risk with these broad system measures is that they drive DNOs to focus on making good performance better instead of addressing the needs of their worst-served customers at the grid edge. To date, DNOs have made relatively little use of the RIIO-ED1 arrangements for their worst-served customers, spending just £2 million on improvements during the 2019-20 financial year.
DNOs have spent much more on resilience. Ofgem’s latest RIIO-ED1 annual report notes they spent £733 million over the first five years of RIIO-ED1, targeting areas such as flooding, physical security, black-start, and tree-cutting. Resilience requirements also are evolving. The combined impacts of climate change, the energy system transition, and changes in customers’ expectations are all adding more demands on the electricity distribution networks.
In essence, the “Net Zero challenge” for DNOs is real, and bold measures are required to both support worst-served customers and to meet the resilience challenges ahead. Ofgem clearly responded to this in its RIIO-ED2 documentation, where both reliability and resilience saw much greater prominence, Further, the draft DNO business plans published on 1 July 2021, suggest major positive changes are coming.
The DNO plans show investments in improving performance for worst-served customers will now play a much more central role in terms of reliability plans. The DNOs are collectively forecasting investment of approximately £100 million on improving performance for some 39,000 worst-served customers.
The DNOs have responded in diverse ways on resilience. Plans include using more distribution automation for faster restoration of power, putting a greater focus on new technologies to improve resilience for vulnerable customers, and building additional resilience to bad weather.
Taken together, the measures show an increasingly broad focus on both reliability and resilience. In turn, this suggests new solutions are needed to continue to drive performance improvements.
Targeted investment at the grid edge can drive improvements for worst-served customers in terms of both reliability and resilience, and it can also reduce short interruptions. This would help address several key priorities simultaneously and prepare networks for changing demands.