ESO welcomes Ofgem paper on Distribution System Operation

Earlier this year Ofgem published a position paper on Distribution System Operation (DSO), outlining their proposed approach and regulatory priorities for the functions and services needed to run a smart electricity distribution network. Andy Wainwright, Business Lead for Whole System at National Grid Electricity System Operator (NGESO), outlines our response and explains how this fits into our wider plans for a Whole Electricity System.

As the Electricity System Operator for Great Britain, we operate the system minute by minute, keeping the lights on. In April 2019 we became a legally separate business within the National Grid Group.

We use this unique perspective and independent position to facilitate market-based solutions which deliver value for consumers. The ESO strongly believes that in the changing energy landscape such solutions need to take a whole system view to maximise consumer value.

Last year we set out our thinking on the benefits of working with others to take a whole system view of the energy transition. These thoughts, informed by stakeholder feedback, allowed us to develop our strategy for whole electricity thinking – to which Distributed System Operation is fundamental.

On that basis we welcome Ofgem’s focus on DSO and the guidance provided by their paper. There are a number of areas which we are already taking action on in our Whole Electricity System approach – particularly the development of more active distribution networks and commercial mechanisms that will support efficient outcomes for the consumer.

We agree with the need to focus on actions in the shorter term to encourage the energy transition too, we are already working with smaller parties through programmes like Power Responsive and initiatives that widen access to the Balancing Mechanism. We support Ofgem's commitment to an agile approach to DSO. Whilst individual projects and outcomes may change our aim remains the same - to work in partnership with DNOs to create coordinated and transparent market opportunities for others. This includes the work we do through the ENA Open Networks programme, and is present in the development of our RIIO2 business plans too, ensuring a least cost strategy that delivers consumer value.

Looking forward we recognise there is more to do and we will engage further with stakeholders as part of our 2020/21 Forward Plan development.

Should you require any further information or would like clarity on any of the points outlined in this response then please feel free to contact me in the first instance at [email protected].