Citizens Advice response to Ofgem Position paper on Distribution System Operation: our approach and regulatory priorities
Citizens Advice welcomes the opportunity to respond to this consultation as part of its statutory role to represent domestic and small business energy consumers in Great Britain.
We welcome the continued focus on the development of Distribution System Operation (DSO) functions by Ofgem as outlined within the Position Paper. We are supportive of the direction of travel on the approach and workstreams proposed by Ofgem which should help to ensure that there will be a more digitalised, decentralised, cost-effective, and lower carbon electricity system.
Our recommendations include:
A higher embedded focus upon wide stakeholder engagement, including beyond the periodic business planning process, to ensure that DSO function development is fully understood, its implications and conflicts are captured, mitigations are appropriately designed, and that there is the widest support for the implementation of any activities.
A focus upon coordinating with Ofgem and BEIS Future Energy Retail Market Review teams to ensure that consumer protections are taken into account in DSO function design. Without appropriate protections, the participation of household and small business consumers in flexibility markets will likely be impeded, which will lead to a less effective, more costly energy system, with slower progress to a low carbon future.
The need to ensure clear boundaries between Distribution Network Operator (DNO) activities and DSO functions to understand appropriate costing of these functions, and to facilitate any future requirement to transfer DSO functions from DNOs.
Having a higher focus within future DSO function development upon dispatch decisions in addition to tendering decisions for alternative solutions.
Looking to develop energy efficiency as an alternative solution within Cost/Benefit Analysis for investment decision-making.