Ofgem requests performance data to calibrate DSO targets

Ofgem has asked electricity distribution networks to submit forecasts and projections for their performance under three new metrics concerning their new roles as distribution system operators (DSOs).

The regulator decided not to apply targets for the first year of the RIIO ED2 price controls, which began in April, but is now requesting performance data to enable it to set targets and calibrate the associated rewards and penalties when they come into effect in year two.

The three new metrics are:

• Flexibility reinforcement deferral, which will encourage distribution network operators (DNOs) to use of flexibility to address network constraints when this is the most economic solution
• Secondary network visibility, which will gauge the visibility and accuracy of the utilisation of pole- and ground-mounted transformers.
• Curtailment efficiency, which will incentivise DNOs to limit the curtailment of users with flexible connections in response to network constraints

In an open letter, Ofgem has asked DNOs to provide projections of their actual outturn performance on all three metrics for the regulatory years 2023/24 to 2027/28. It has also asked them to provide forecasts for the secondary network visibility metric and primary network forecasting accuracy in the 2023/24 regulatory year.

The regulator said it welcomes views on sensitivities and the margin of error within the submitted information, any difficulties DNOs have faced when collecting this information, as well as how these issues can be managed when setting targets.

Ofgem said it will hold a series of working groups in late summer to discuss its proposals for DSO target setting. It will then consult on its draft targets, deadbands and maximum reward/penalty scores before issuing a decision in winter 2023.

The deadline for the submission of the requested information is 17 July.