Citizens Advice response to Ofgem Key enablers for DSO programme of work and the Long Term Development statement consultation
We agree that there is a need for improved visibility of Distributed Generation (DG) and Low Carbon Technologies (LCT) connected to the distribution network. Greater visibility is important to assist the development of a more effective energy system involving greater levels of DG and LCTs, and to facilitate a flourishing and deep flexibility market. It may be useful to incorporate further data within the Long Term Development Statement (LTDS), some of which is currently captured within the Distribution Future Energy Scenarios (DFESs). This data could include, for example:
Cross infrastructure data from industries such as water, communications, transport, waste, etc. This data may help to minimise disruption and cost to consumers caused by groundworks.
Planning data from local authorities to show how the energy system may be changing in the future.
Asset monitoring data from technical assets such as smart meter metrics, usage of storage, etc. This may enable opportunities or innovative solutions to be identified.
Market data such as flexibility contract information and usage statistics.
Demographic data to show predicted changes in usage and identify potential future constrained areas.
We support this consultation in addressing the need to reform the LTDS and incorporate new forecasting elements, such as the DFESs, which may play an increasing part in electricity Distribution Network Operators’ (DNOs) business planning.
Subject to the establishment of the likely regulatory and cost implications, we believe that it would be appropriate for the larger Independent DNOs (IDNOs) to be issued with a direction to produce a LTDS. Smaller IDNOs, with more restricted resources, could be exempted, pending satisfactory justification. If this ‘larger versus smaller’ IDNO distinction is made in LTDS requirements, we would recommend further consultation to determine the appropriate size of IDNO that could be exempted.
In addition to Ofgem’s attention upon the LTDS and DFES, we welcome prioritisation of:
Data issues , especially the development of :
Measures to ensure that smaller entities or community energy groups can participate readily within the flexibility market
The establishment of common standards for flexibility procurement and dispatch including the transparency of contracts and dispatch to the maximum extent feasible
The consideration of the regulatory environment surrounding third party intermediaries offering flexibility services such as aggregation. Consumer protections need to be put in place that are fit for the future for domestic consumers and small businesses to have confidence in the flexibility market. It may be valuable for the Ofgem DSO and Whole Systems team to ensure close coordination with the Ofgem Future Retail Market Design Team in this regard. We refer you to our 2 recent reports on this topic:
The consideration of energy efficiency as an alternative to traditional infrastructure investment decisions or flexibility procurement
Considerations relating to the separation of DSO functions to facilitate cost transparency; development of licence conditions, outputs and incentives; and to alleviate concerns relating to perceived or actual conflicts of interests
The consideration of whether DNOs should be able to contract, offer or undertake flexibility services directly with domestic consumers (such as aggregation or turn-down). We are concerned that DNOs contracting directly with domestic consumers will create a significant barrier to market development. We believe that a market based approach is more likely to benefit consumers as competition should drive lower costs and higher levels of service.
Measures to reward whole systems thinking , including with or via third parties
Appropriate continued stakeholder engagement by DNOs with wider stakeholder groups, including household consumers and micro-business consumers, so that the DNOs’ plans for DSO activities can be shown to be driven by consumers’ wants and needs
Protections for consumers with respect to product and service provision which may be offered by DNOs or by third parties (such as aggregators or other flex providers)