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As networks prepare for a big surge in demand from electric vehicles in the coming years, Utility Week explores SSEN’s controversial proposals to use smart meters to disconnect home chargers and other low-carbon technologies if they are at risk of overloading the local infrastructure.
In probably one of the oddest shareholder meetings ever conducted by a multi-billion-dollar corporation, Tesla founder and chief executive Elon Musk set out plans earlier this week to lower the per-megawatt-hour cost of its batteries by more than half over the next three years.
With investors sat in rows of the company’s cars and honking by way of applause, Musk explained how this cost saving and others would allow the carmaker to sell a new model with a price tag of just $25,000 – putting it on par with its internal combustion engine rivals.
The imminent arrival of this long-predicted tipping point for electric vehicles is a big concern for networks, who fear being caught out by a sudden surge in demand.
Scottish and Southern Electricity Networks (SSEN) was so worried that back in July the distribution network operator (DNO) submitted a pair of modifications to the Distribution Connection and Use of System Agreement (DCUSA) and the Smart Energy Code that would allow DNOs to use the smart meter infrastructure to limit power supplies to customers as a last resort if the local network is at risk of being overloaded.
Explaining its motivation in the proposal document for the DCUSA modification, SSEN said Britain’s electricity networks were not designed to cope with the demands of low-carbon technologies such as electric vehicles chargers and heat pumps.
It acknowledged the role flexibility services can play in helping to reduce the impact on networks but added: “In the event that market mechanisms fail or do not deliver to the extent anticipated, the distributors will still need to protect physical assets from overload caused, for example, by the take up of low carbon technologies by domestic customers. This change proposes a distributor smart intervention as a last resort, emergency measure, to protect customers security of supply and the network assets.”
SSEN said the proposals would allow DNOs to use the WiFi networks created by smart meters within customers’ homes to switch off power supplies to specific technologies.
The company gave assurances that it would not do so without obtaining the customer’s consent first: “Distributors would contact the relevant customers, explaining the situation and outlining the solutions they propose to use in the short-term and provide details of any longer-term solutions being considered. The aim will be to obtain the customers consent and then inform the supplier of this agreement and that the distributors will be using the load management feature until a more desirable solution is achieved.”
However, the proposals are now facing a backlash after the story was picked up by several of the national newspapers, who warned that the smart meters in many readers’ homes could be used to cut off their heating. Among the critics quoted by the papers was Clementine Cowton, director of external affairs at Octopus Energy.
Speaking to Utility Week, Cowton says there is “absolutely no evidence” that DNOs need this capability, claiming retailers like Octopus have already shown how smart systems can be used to shift demand away from peak times if consumers are presented with the right incentives: “This is a clockwork solution in a digital world. It’s not appropriate and it’s not necessary.”
She continues: “It violates really important principles of how the energy system is supposed to work. DNOs are not supposed to be able to reach into customers’ homes and switch off their energy supply. The burden of justification for that needs to be incredibly high and we are nowhere near that.”
Describing it as a “clunky, blundering intervention”, Cowton says the proposed powers could further tarnish the public reputation of smart meters, which are far from being universally accepted: “Customers like smart meters if they can see a benefit from them; if they reward them in some way or get them a cheaper tariff; if they improve their lives.
“If customers start to perceive smart meters as a kind of backdoor into controlling their homes and their lives, then it makes our job really hard to get customers to embrace the smart meter switch, which they absolutely need to do.”
Citing UK Power Networks as an example, Cowton says some DNOs are embracing a more “customer-centric” vision of the future. But, she adds: “There are other DNOs, I think, who still see themselves in a Soviet-style command and control system and don’t believe that it’s their duty to design the energy system around customers.”
When asked why flexibility markets have not developed faster, Cowton says part of the problem lies with the failure of network charges to create the right price signals to drive changes in behaviour. However, she also blames a “dinosaur culture” at some of the network companies, “where they view technology with suspicion”.
“Networks have pushed back hard on having to do so because they say their IT infrastructure isn’t up to scratch,” she adds. “What we need to recognise is that’s not a good enough excuse.
“Just because something is not currently possible under their existing IT systems, does not mean they should not have to do it. And if they need to update their IT infrastructure, then so be it.”
Catherine Mitchell, professor of energy policy at the University of Exeter, describes SSEN’s proposals as a “step back to passive management”. She says they would undermine the development of the smart time-of-use tariffs that can manage demand on the power grid while still leaving customers in control.
“Networks have had a lot of time to become active and yet there have been minimal moves. Ofgem has done little to provide more incentives to ensure that activity,” she tells Utility Week. “Not only does this modification allow networks to continue at their snail’s pace of change but it undermines the new entrants trying their best to operate in a sustainable, market-based way for the benefit of customers.”
She says the issue once again highlights the need for reform of the code change process as well: “Self-regulation of codes by signatories has to end.”
Matthew Roderick, chief executive of the consultancy N3rgy and former chief technology officer for the Data Communications Company, recognises the inertia described by Cowton and Mitchell, saying digitalisation of networks is proving “extremely challenging”.
However, he also believes the same “ingrained culture” means networks will want to “keep the lights on” whenever possible: “They’re encouraged through the regulatory framework. They’re encouraged through their engineering practices. They’re encouraged through their operational culture.”
Given the “enormous amount of change” DNOs are undergoing, Roderick believes the powers proposed by SSEN are a “sensible precaution”.
He notes that retailers can already use the same smart meter functionality to disconnect customers who are not paying their bills: “If the retailers have this capability for economic measures, why shouldn’t the networks have this capability, with similar precautions and similar limitations, to pave the transition to a greener, more environmental friendly, more renewable energy system.”
He says the bigger issue is the circumstances in which these powers could be used: “Smart meters aren’t that intelligent. It’s the people that have control over them that are the risk factor and the industry is governed and regulated to quite an extensive level to try and control that.”
“Because this is a pretty unpalatable measure in political and consumer circles, it will have to have quite stringent controls put around it,” he adds. “There’s challenges around the vulnerability register in the industry and how accurate that is. Those individuals need to be excluded from this facility.”
After being held up as an example to follow, Utility Week spoke to UK Power Networks to seek its views on the matter. Its director of strategy and support services Suleman Alli said in a statement that the company seeks to “always promote customer choice, first and foremost. Our job as a network operator is to ensure that the electricity networks are ready to serve customers’ changing needs and to not be a blocker to decarbonisation.”
However, UKPN would not be drawn on whether it supports SSEN’s proposals.
Although they may be unwilling to say it, Roderick believes all DNOs would really like this emergency backstop in place: “How change typically works within the DNO world is one of them volunteers to lead it and they all follow suit. So, in this instance, SSEN has taken the poisoned chalice to lead it, so to speak, and has taken flak as a result.”
Responding to some of the recent criticism, SSEN stressed that under its proposals customers’ consent would be “required in all instances, could be revoked at any time, and curtailment would be capped at two hours a day and a maximum of eight hours in a month”. It said this “contingency arrangement” would be in place for a maximum of 12 months while alternative solutions were investigated and implemented.
This does slightly raise the question of why customers would be willing to have their power supplies cut off at all. Would, for instance, their answer determine whether they can get an electric vehicle charger installed? Any suggestion that customers are being pushed to give up control of their homes is unlikely go down well as the recent reaction demonstrates.
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