Gas and electricity networks are getting smarter, slowly

Building a 'smart network' where data can accelerate decarbonisation and cut operating costs is an agenda-setting priority for every distribution and transmission company. Already, network companies have chalked up their first trials and even moved into 'Business As Usual' territory. But as a recent debate and workshop discussion at the Utility Week Live Summit showed, there is still a long way to go.

Smart devices can be used for real-time network monitoring and instant interventions, to create the market transparency and free-flow of information that drives the flexibility, or to monitor for better environmental, safety and security outcomes. “You shouldn’t just strive for one-dimensional outcomes,” advised Ajit Rai, UK area manager at instrument specialist Terranova

But, as emerged from the opening panel debate and the subsequent workshop discussions on Net Zero and flexibility: the vision and the experience at the Utility Week Live Summit, sponsored by Capita, the barriers to smart networks are substantial. Organisations are building strategies and policies without full knowledge of the regulatory environment they will be operating in, and whether investment programmes will be synched with regulatory incentives.

“Until Ofgem determines the approach to future network access and the associated network charging arrangements, a lot of my current work on flexible connections can only go through incrementally,” said workshop participant Fiona Navesey, director of flexibility and markets specialist Oodles Energy. “Until we get these decisions, it’s hard to move forward.”

“Open Data” might be the watchword, and the policy goal. However, making data available to any party that might want to base investment decisions around it, and making it flow across the generation, transmission and distribution domains and exchanged seamlessly from source to software platform to a consumer-level app, is still more vision than reality.

And, as the workshop explored, the sector is trying to build a culture of data monitoring and data sharing where none existed before – and indeed when central regulation encouraged the six DNOs to adopt a competitive mindset when it came to targets and outcomes.

But, with the problems stacking up, one workshop participant wanted to emphasise that the scale of the challenge is proportional to the success of network management policies in the past. It’s precisely because networks were carefully calibrated to avoid redundant capacity that today’s systems are struggling to absorb new connections or flex generation solutions.

“If we had networks that were capable of beating the net zero challenge today, then they would have been overspent on and over-engineered in the past,” said Gary Swandells, director at Smart Grid Consultancy.

Smartening up their act

In the panel discussion, Farina Farrier, project manager for Open Networks at the Energy Network Association (ENA), described the networks experience so far and the role of the trade association:  the six organisations that hold 14 distribution licences in Great Britain have plans to tender over 2.9 gigawatts of flexibility this year.

The ENA’s work, and those of the DNOs, are guided by six guiding principles and a roadmap, adopted in 2019. “The local flexibility market is an area of high priority for us, and we are helping to standardise and simplify approaches in this market – the electricity networks are all committed to taking a flexibility first approach,” said Farrier.

But what is the on-the-ground experience of “flexing” the networks? Two DNOs outlined their approach. First, at Scottish and Southern Electricity Network, lead commercial contract manager Steve Atkins outlined how system resilience is as compelling a rationale as decarbonisation.

For instance, SSEN contracted hydropower flexibility to replace a diesel power station that was the fail-safe in the event of a failure of the submarine cable between Ireland and the west of Scotland. “The benefits are reduced carbon content, reduced unit cost, improved utilisation of the system … and supporting network resilience,” Atkins said.

But current market conditions can frustrate flexibility providers, he notes, with National Grid and the DNOs sometimes expecting ‘exclusivity’ in contracts, and the prices offered in the wholesale energy market affecting the investment tipping point for projects and thereby restricting ‘liquidity’.

As a result, he said, SSEN is “working to ensure, over the coming years, that people are able to stack these flexibility services easily and effectively, making sure that they can maximise the opportunities within the markets. For instance, one objective is to remove the use of exclusivity clauses”.

The power of flexibility

Ben Godfrey, manager for the distribution system operator transition at Western Power Distribution, noted that its flexibility programme now covers 25 per cent of its network, with 450MW in contract, deferring £39.4 million of reinforcement works. “Those are tangible savings providing benefits back to our customers,” he said.

WPD’s Flexible Power online platform is now used by five of the six DNOs; providers can view flexibility locations, requirement data, procurement notices and documentation published by all five.

“All the tools, toolkits and platforms that we use on Flexible Power are now being adopted across five of the DNOs. So that comprehensive coverage, and commonality of methods … are really important to bring confidence to the market and make sure providers recognise it’s no longer just an innovation trial but is being embedded in ‘business as usual’.”

Godfrey explained that Flexible Power built on the Open Network Project’s work on standard contract terms, standard dispatch methodologies and standardised data. “It allows …. the other DNOs to adopt some of the APIs, for pushing data in and out of the platform, and helping flexibility be dispatched, monitored and settled as well.”

At the workshop, Fiona Navesey, director of Oodles Energy, a flexibility and markets specialist, reiterated the value to flexibility providers of working to a standard template. Voicing the views of flexibility providers, she said: “I work nationally, and I want to have the same product, the same contract, the same connection arrangements. I don’t want six different DNOs with 6 different approaches.” But she also stressed that the DNOs and the ENA, through the Open Networks Project, were vey much focused on delivering such outcomes.

Agreeing, Swandells said that “there was still plenty of room” for DNOs to differentiate their services. He added: “The word we often hear when discussing flexibility markets is liquidity  – so if you want that, keep the barriers to entry low, and make it simple.”

In answer to a point raised in the opening session of the Utility Week Live Summit, Godfrey denied that there was a “treacle like” approach to flexibility procurement in the sector.

“Currently, most of the DNOs have settled on a six-monthly procurement cycle that gives them a few chances a year to go and tap into providing those flexibility services. But what we’re seeing now is a little bit more of an exploration from the DNOs into closer to real time procurement,” he said.

But in the workshop discussion that followed, at least one participant was less than impressed. “Interesting that two chance for procurement a year is considered agile,” they said.

Measuring the pressure drop

Meanwhile, over on the gas side, Terranova’s Ajit Rai described a “smart data” trial on a 9,000 customer local gas network in norther Italy, to monitor gas pressure.  Reduced pressure means lower leakage of methane – a potent greenhouse gas – so maintaining pressure at the lowest possible level without compromising supply was the goal.

Rai describes how the project collected data from field-based regulators and data loggers to monitor varying levels of end-user demand, all managed by a centralized software platform that could remotely administer remote interventions. “The trial outperformed the target rate of gas leakage,” Rai reported.

The trial had additional elements. To avoid having sensors powered by “myriads of spent lithium ion batteries”, the trial was able to “harvest the energy of the flow of gas in the network using field-based micro turbines to generate all the power needed to allow real time monitoring”.

And it used sensors and equipment that were “communication device and manufacturer agnostic”, Rai explains. “Proprietary systems appear great at the outset, but being tied to them can hinder decision making. This inflexibility in years to come can prove costly and doesn’t scale well when it comes to supporting utility companies with their future digitalization and net zero obligations.”

Instead, adopting an open technology standard that spans across a range of devices and mobile networks means that energy networks are “free to move in whatever direction the market guides them, or [to respond] to any demands that the regulator puts on them.”

History and culture

As workshop participants reflected, the complexity of the future challenge contrasts starkly with the simpler networks of the recent past. As Navesey pointed out: “Until recently, you didn’t need technology or intelligence at the end of the distribution networks, because it was a simple matter of physics – electricity came in at transmission level and it flowed to the home by following the laws of physics. Historically, the incentives were to reinforce, not necessarily to put in the intelligence and systems you need to run a smart system. So networks are now in the process of transforming the way our energy networks operate.”

Workshop contributor Gary Swandells also made the point that the network companies are working against the cultural grain when they are asked to engage in partnership, collaboration, and developing the capabilities of local flex providers and markets.

“The networks [may be] operating behind closed doors, but in the past, no one wanted to talk to them. They don’t have customer service departments, they don’t have sales departments. There is a massive cultural step they need to be take to be able to manage those relationships.”

Navesey agreed, saying that the post-Utilities Act  environment – which split the DNOs from customer supply functions and created separate licences – created that dynamic.

“Ofgem wanted to be able to challenge the weakest [DNO] with what the strongest ones do. But now you want the market to be consistent and have the same systems and the same policies when we’ve had years of diversifying! So now we’re trying to unravel some of those processes.”

No one’s playing games

Both the panel discussion and the workshop debated dwelt on the need to increase data and transparency on the low voltage networks. The networks simply don’t have the same volume of data on the low voltage networks that they hold on the 33kV and 132 kV networks, while factors such as the weather, and uptake of EVs add to volatility and difficulties in forward forecasting demand.

Swandells drew a colourful analogy: without adequate data, anyone hoping to connect to the network was playing the guessing game “Battleships”. “It’s E5 – you missed! E7 – you found it! But we need to get away from guesswork and sinking Battleships , you need to have direct access to where the opportunities are,” he said.

At the ENA, Farrier confirmed that there was a specific work programme to “identify options and use cases to find a standard way of getting low voltage visibility.”

Mark Nigge-Uricher, a senior managing consultant at Bosch, highlighted the benefits to the flex roll-out and rise of “prosumers”: “If you provide transparency to all stakeholders, by providing data in a good and accessible format, then everyone can understand [scenarios such as] not getting the permit to build my PV, because there is so much generation and otherwise the DNO needs to build a larger cable, and the cost is going to be shared. So maybe in that scenario you would wait until EVs come in and increase the demand side. Transparency is one of the parts that really matters [to increasing .”

But he also highlighted the difference in scale between the data captured by networks’ SCADA systems for high voltages, and the volumes of data captured by sensors and devices on the LV network.

“There are difficulties in the merging of operational technology and information technology, in other words OT and IT. The data systems for the high and low voltage systems are at a completely different detail level. The first operating at millisecond level, whereas the second at minute level. You have two kinds of scale and need to bridge and align them – the physics world and the virtual world have to merge together.”

At Terranova, however, Rai offered some words of comfort. “Integration between new devises and SCADA systems can be long and complex – that’s the bad news. The good news is that a centralized software platform can make the integration process faster and economical, and allow  field based device data can be disseminated to SCADA quickly.”             

Clearly, investing in data collection and sharing will be key to transformative change and decarbonisation in the networks. Sensors allow the DNOs to quickly respond to issues before they become a problem, hence lowering overhead and operating costs. And the real-time data gathered on flexibility will facilitate greater “liquidity” in the low carbon energy market, and the real-time balancing decisions that allow “prosumer” participation.

But Swandells wanted to inject a note of realism, and an acknowledgement that cultural and technological change needs time. “I’d say we’ve got a lot further to go than we’ve come , I would say that for the purposes of ED2, which takes us through to 2028 I would be setting the expectation of having the majority of work done by then, not within the next year or two years.” While the networks have gained considerable experience, it’s still a question of realising the vision.