Ofgem to impose new data requirements on networks

Ofgem has announced plans to introduce new licence conditions as part of the RIIO2 price controls requiring network operators to follow a set of best practice data principles and publish annual updates to their digitalisation strategies.

The regulator was giving feedback on the first iterations of these strategies which were submitted by network companies in December. The Energy Data Taskforce had recommended the strategies be developed to set a baseline for networks’ progress on digitalisation.

The documents were requested as part of the business planning process for the RIIO2 price controls beginning in April 2021. As their price control does not begin until April 2023, electricity distribution networks were asked to submit theirs voluntarily.

The response was generally positive, with Ofgem describing the strategies as “thorough and ambitious”. The regulator said it was “pleased to see how much thought and planning has been put into describing the challenges and opportunities in digital and data improvement across the sector” and confirmed that their objectives are “broadly aligned” with the findings of the Energy Data Taskforce created by itself, Innovate UK and the Department for Business, Energy and Industrial Strategy.

However, Ofgem said there also needs to be greater distinction and prioritisation between different activities and more accountability at a senior level. Key information such as costs, benefits and environmental impacts is “generally absent” and milestones and outcomes are “generally unclear”. “Programmes are explained at a high level, but it is not clear what success looks like,” the regulator added.

Ofgem instructed network companies to publish revised digitalisation strategies addressing these issues by 31 December 2020 and announced that this will become a recurring deadline henceforth: “We are proposing to introduce a licence condition in the RIIO2 price controls for transmission, gas distribution and the Electricity System Operator starting in April 2021, and separately for the RIIO-ED2 price control starting in April 2023. This will require network companies to publish updates to their digitalisation strategy annually and to report regularly on progress against their action plan.

“We also intend to introduce a licence condition requiring network companies to comply with data best practice guidance. The guidance is being developed as part of the Modernising Energy Data programme – a collaboration between Ofgem, BEIS and Innovate UK. We will provide more detailed information on both proposals in July at RIIO2 draft determinations and as part of the sector specific methodology consultation for RIIO-ED2.”

This work is being led by the Energy Systems Catapult which has developed a set of 12 principles for the use of data in the energy industry:

• Identify the roles of stakeholders of the data
• Use common terms within data, metadata and supporting information
• Describe data accurately using industry standard metadata
• Enable potential users to understand the data by providing supporting information
• Make datasets discoverable for potential users
• Learn and understand the needs of their current and prospective data users
• Ensure data quality maintenance and improvement is prioritised by user needs
• Ensure that data is interoperable with other data and digital services
• Protect data and systems in accordance with security, privacy and resilience best practice
• Store, archive and provide access to data in ways that maximise sustaining value
• Ensure that data relating to common assets is presumed open
• Conduct open data triage for presumed open data

Responding to the announcement from Ofgem, Energy Systems Catapult data system practice manager Richard Dobson said: “This represents another step forward for the digitalisation of the energy sector, where modern data management principles will underpin the move to a more flexible, net zero energy system. This will increase transparency and create opportunities for low carbon innovators to access data which will enable a range of low carbon products and services.”