Making the first move towards DSO

by John Hayling

John Hayling

John Hayling of AMT-SYBEX makes the case for distribution network operators to take the first steps on the road to DSO


In the 1950s and 60s, the UK’s electricity network expanded dramatically to meet increasing consumer demand. New investment in generation, transmission and distribution meant that a large number of assets were added to the network—many new power stations and overhead lines were built, and thousands of miles of cables were laid.

This network expansion created new capacity to meet ever-increasing demand, which has served the country well over the past half-century. Today, however, the paradigm of large fossil-fuel plants connected to the transmission system is starting to shift. Centralised generation is being replaced by new renewables such as wind and solar, which are increasingly connected to the distribution network.

In addition, changes to demand profiles will give rise to higher peak demands. As demand patterns fluctuate and embedded generation continues to grow, the network must operate under increasingly complex constraints, and the industry is facing difficult questions about how to ensure energy security for the future.

Essentially, there are two options: build more assets, as we did in the past; or get smarter about managing the existing network. The government’s Smart Systems and Flexibility Plan comes down strongly on the side of making more efficient use of what we have.

Enter the DSO

The discussions around this topic have popularised the concept of the Distribution System Operator, or DSO—a network operator with a portfolio of flexible assets that enable responsive demand, storage and controllable generation, enabling it to maintain the correct balance between supply and demand within the UK’s regional distribution networks. DSOs will have a key role to play in optimising the energy network, using techniques such as active network management and demand-side management to get the maximum benefit from existing network capacity, and reducing the need for conventional reinforcement of the network.

The transition of today’s Distribution Network Operators (DNOs) to the new DSO model is not going to happen overnight. The intention is clear, but the details are still to be fleshed out. As members of the Energy Networks Association, the network companies are currently reviewing all the possible business models as part of the Open Networks Project, and there are many open questions about how the DSOs will operate and how the local flexibility markets will work.

Time to act

However, the preliminary nature of these discussions should not be taken as an excuse to defer DSO initiatives until later. Opportunities are already emerging for DNOs who are willing to take the first steps on their DSO journey—and significant risks are lying in wait for those who delay.
For one thing, the DSO concept isn’t just something that will be needed to manage some mythical future state of the electricity market. The challenges that DSO seeks to address are already evident in today’s grid.

For example, the growing trend for solar panels and wind farms is becoming increasingly problematic for a network designed for centralized power generation, and the increasing adoption of electric vehicles (which effectively act as large storage batteries) will add further complexity. DNOs have no control over the proliferation of these new assets, only an obligation to connect them—so they need to become flexible enough to deal with changing supply and demand patterns as they evolve.

If DNOs don’t start getting to grips with these issues today, the range of options available to them is going to narrow quickly. At some point, if the use of flexibility services is not fully embraced, the only way to manage these constraints will be to boost capacity by building more infrastructure, just like we did in the 50s and 60s—an expensive option that will be unpopular with DNOs, customers and regulators alike.

Starting the process

So how can we get started? One helpful approach is to think about the systems we will need to put in place to help DSOs with their balancing act. These systems will have two key roles to play.
First, they will need to be able to forecast supply and demand at a highly granular level. For example, they will need to understand what local flexibility services there are in each area, and the local power usage on an hour-by-hour basis. They will also need to use weather data to predict how much electricity will be generated from wind and solar panels on an hourly basis. This type of insight will help the DSO understand the problems that are likely to arise on the grid over the coming days.

Second, the systems must be able to help the DSO take action to resolve these problems. For example, they could respond to a set of business rules based on the DSO’s demand-side management and other flexibility services contracts, and automatically dispatch instructions to tell specific smart grid assets to temporarily increase or decrease their electricity consumption.

Investing in innovation

For many years, National Grid, the Transmission System Operator has been using systems like these to handle similar problems on the macro scale of the national transmission network—but the distribution network presents a more complex challenge at a much more local level. So DNOs are going to need to invest in research and development, to come up with solutions that work for their unique requirements.

At AMT-Sybex, we’ve recently joined forces with Western Power Distribution to investigate this problem, and secured innovation funding from Ofgem to develop an Electricity Flexibility and Forecasting System. We’re hoping the results of this partnership will be a valuable step on the DSO journey, and provide useful insight to help the whole DNO community move forward as we build an energy network that is truly fit for the future.