Dec 2015
Electricity Distribution
Dec 2015
Dec 2021
SP Energy Networks
James Yu (Future Networks Manager)
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Network Innovation Allowance
ED - Network improvements and system operability
Network Monitoring
The high level scope of this project is to demonstrate the UK's first trial of the Distribution System Operator concept: exhibiting how operating a localised balancing market can reduce customer bills through efficient provision of services and optimised network performance while facilitating cost effective growth in local generation, demand side response and energy storage services.

To deliver this SP Energy Networks has identified several discrete Work Packages, each subject to stage gate reviews, to be delivered under the project:

Work Package 1: Market Design

WP 1 will focus on the design of the DSO Market. The key tasks in this work package include

  • Detailed assessment of existing marketing including existing procedures and services

  • Identify high level requirements for new contractual arrangements

  • Identify contractual and regulatory requirements

  • Identify incentive scheme for trial

  • Consult and map responsibilities, financial and data flows between stakeholders including Ofgem,

  • National Grid, Demand Response Commercial Aggregators, Generation Developers, Industrial and Commercial Customers.

The market design work package is focussed on identifying process improvements and integrating market requirements with smart commercial interventions to develop the market under the GSP.

The market design will determine the appropriate level of incentives to apply to DSO participants. The work package will begin with a literature review of existing DSO market structures around the world and then consider the specifics of the SPD/SPT licence area.

Work Package 2: Technical Solution Design

The technical solution design will focus on the interface between different market participants. It will consider the key enablers and will be focussed upon the enabling technologies that are required in order to get the appropriate visibility and control of devices and DER to undertake the trial. Enablers include communications, control systems, trading platform, interaction with National Grid, balancing & settlements and billing.

The key tasks in this work package include:

  • Identify high level requirements for the new system interfaces

  • Design the interface with SO, implementing processes for solicitation services to National Grid Energy Balancing System (EBS)

  • Design the interface with customers

  • Design control and communications processes

Work Package 3: Industry Consultation and Dissemination

WP 3 will involve disseminating the project knowledge including market principle recommendations to the wider industry.

The key tasks included in this work package include:

  • Knowledge dissemination

  • Industry consultation and recommendations

  • Closedown report

Each discrete Work Package has Objectives:

WP 1:  Market Design

  • Produce literature review of existing DSO market structures around the world.
  • Create Market Design including:
    • Requirements for new contractual arrangements
    • Incentive scheme
    • Stakeholder responsibilities, financial and data flows


WP 2:  Technical Solution Design

  • Create Technical Solution Design including:
    • Requirements for the new system interfaces
    • Interface with National Grid Energy Balancing System (EBS)
    • Interface with customers
    • Control and communications processes 


WP 3:  Industry Consultation and Dissemination

  • Effectively disseminate the project learning and business process maps to ensure that the stakeholders can benefit from the delivery of the project including:
    • Detailed business process maps for alternative approaches to establishment of DSO model and services
    • Proposals for structure of future market for establishment of DSO model
    • Learning and technical documentation to support the technology deployed and how this interacts with commercial mechanisms established with DER providers/DSO/SO
    • Closedown report, consultation and recommendations to industry         
The project will be considered successful if the aforementioned objectives are realised.