‘Flexibility is a win for everyone’

Sotiris Georgiopoulos, head of smart grid development at UK Power Networks, talks to Utility Week about his new role as chair of the Energy Networks Association (ENA)’s Open Networks project – what’s already been done and what he’s hoping to achieve.

Sotiris Georgiopoulos is not new to the Open Networks project and the issues it seeks to address.

He has worked in the energy sector for more than 15 years – all of them at UK Power Networks (UKPN). In 2016, he led the establishment of the smart grid development at UKPN, which he still heads, and has been representing the company on the Open Networks project since it launched in the same year. Prior to taking on overall responsibility for the project from Nigel Turvey at Western Power Distribution, he was its chair of flexibility services.

The industry initiative aims to transform networks to create the smarter and more flexible energy system that will be required to facilitate its decarbonisation.

“The way Open Networks has evolved over the last five years has very much focused, and I think has made huge amounts of progress, in trying to bring transmission and distribution together,” says Georgiopoulos. “It has focused on how we can deliver value from flexibility and we have also started doing a lot of significant work on data, digitalisation and information provision.

“As we move into this decade to 2030, the main shift we’re going to see is the mass take-up of low-carbon technologies by consumers and domestic customers and their more active participation in the energy system.”

“It’s really a very, very exciting time of the sector,” he adds.

“The last two or three years I’ve worked on the flexibility workstream and this is of course going to remain one of the core areas and is the biggest area of work for the 2021 programme.

“Flexibility is a win for everyone. It’s a win for the participants and the providers and the consumers and the business users that actually provide the flexibility and are able to earn a revenue stream. It’s a win for networks because by using flexibility they can keep costs of down. It’s a win for consumers because by networks companies keeping their costs down, they are able to pass some of the savings through to all consumers.”

Georgiopoulos says the project has been working to reduce the cost of participation in flexibility markets and lower the barriers to entry, primarily through standardisation, including the development of four common core flexibility products: “These are now widely used and, as part of Open Networks, we are continuously looking at the characteristics and making sure we standardise where we can.

They have likewise developed a common procurement process and core contract.

“It’s a huge achievement because we have aligned six different contracts,” he remarks about the latter, which has been adopted by all six of the distribution network operators. “There was scepticism as to whether this was doable, but we got there as of last April.”

The Energy Networks Association announced an updated version of the contract at the start of this month: “We don’t live in a static world. It’s a very dynamic environment. It’s a fairly new market”.

“We think it’s quite an agile, adaptable process and there’s going to be a revision of the contract going live later this year in August/September, which is going to align with the Electricity System Operator (ESO) contracts so we’re going to have a national alignment in terms of flexibility contracts.”

They have additionally developed a standard methodology for valuing flexibility: “This is to give transparency and trust that distribution networks all use the same way to put the pounds signs to the flexibility tenders.”

“I’m proud of the work that we have done, and I think the key thing is that we are trying to work at pace,” he adds. “It’s not a talking shop. We are getting things done and there is a lot of good output.”

As well as continuing the aforementioned work, Georgiopoulos says a key area of focus in 2021 will be the interplay between flexibility markets and flexible connections: “Flexible connections are now widely used and they deliver significant benefits for the connecting customers in the sense that the connecting customers are getting significantly cheaper connections.

“It’s a route to affordable grid capacity but at the same time I think we recognise that these arrangements have now been in place for more than five or six years and they need to evolve. We need to look at ways of providing more certainty, and we need to look at ways of linking them with the flexibility markets and flexibility services to make a more coherent picture of how these different elements fit together.”

The risk of curtailment that comes with a flexible connection agreement is currently allocated on a first come, first served basis – or rather first come, last to be curtailed to be precise. Network users get put in a queue based on the order in which they signed a contract. The queue is fixed in that order and the last in the line is curtailed first.

“That system is a static system,” Georgiopoulos explains. “It doesn’t recognise the different types of technology. It doesn’t recognise the different types of business model. It doesn’t recognise the different stages of whether you are operational or under construction.”

He says networks want to explore whether there are “more efficient, options for resolving the curtailment, meaning keeping the overall cost of the curtailment as low as possible.” Flexibility markets could allow network users to pay or be paid to reduce or raise their risk of curtailment to reflect their particular circumstances or requirements.

He continues: “Ofgem is looking at some of this work as part of the significant code review on access and forward-looking charges so we’re going to work closely with Ofgem on these products, but we are trying to really look at different options for how flexibility markets and flexible connections can come together in conjunction, of course, with the ESO.

“The ESO is participating actively in the process… to make sure whatever we are coming up with is in alignment with the national market as well.”

Georgiopoulos says any changes will, however, need sign off from the regulator: “If there are more efficient ways you can do that using flexibility markets, I think the question and the discussion then with Ofgem is: how are these costs recovered and how do these costs feed into the charging mechanisms and the regulatory framework?”