Customer-Led Distribution System (NIA_NPG_19)

CONTEXT

The transition from Distribution Network Operator to Distribution System Operator (DSO) is a complex issue many possible options for restructuring the distribution sector. Identifying the most appropriate industrial structure that can achieve the best whole system outcome requires advanced understanding of interplays between the operation of markets for energy and for network services, network operation, infrastructure development and the growth of distributed energy resources (DERs). We will address the problem of how to accommodate large volumes of DERs at the least cost while at the same time delivering value to DERs so that they can thrive in market-based conditions.

APPROACH

This project will use desktop studies and laboratory demonstration to:

• Consider customised products for both energy and network services in designing markets for the distribution sector and the implications for industry structure.

• Explore DSO functions at a sufficiently detailed level to model and understand flows of energy, payments, and information.

• Develop strategies that DSOs could use to coordinate network operations and market operations.

• Determine the overall system efficiency gain from an agile distribution market design that suits local needs and is able to deliver customised energy products and services. Explore any trade-offs between network efficiency (e.g. losses) and overall energy system efficiency.

• Demonstrate the impact of market operations on network operations and on the scale and type of DERs.

• Explore pathways from the current state of distribution network operation to a future state of distribution system operation which includes co-evolution of markets, infrastructure and DERs.

• Quantify the value to stakeholders from introducing energy markets to the distribution sector.

EXPECTED OUTCOMES

We will identify and demonstrate the most appropriate market design & industry structure to:

• Enable the optimisation of network and DER resources.

• Enable 3rd party providers to realise maximum value of DERs through market-enabled energy and network products.

• Enable the uncertainty and complexity of the supply system to be substantially reduced by distributed and coordinated market and network solutions.

Timescales: 11/2017 - 04/2021

Associated documents:

• Update on project learning (2019)
• Value creation by local energy markets and the implications for the transition to DSO
• Electricity Market Structure, Market Design and Implications for DSO
• Future Industrial Structure of the Distribution Sector
• Mapping of DSO projects
• Local Markets (presentation to LCNI conference, October 2018)
• Project Overview
• Project registration document