By Fiona Navesey, Director of Wholesale Markets, Centrica
The way we power our homes and businesses is changing. The UK has already started the transition towards a smarter, more flexible energy system with increasing amounts of decentralised energy powering the grid and offering flexibility services. Technology is also allowing consumers to use energy in new ways: managing demand intelligently and interacting with the electricity grid and flexibility markets to unlock new sources of value.
Centrica has committed to this new world, refocussing our efforts away from centralised power to smaller, more flexible generation and storage initiatives. As part of this, we’re well under way with the construction of one of the world’s largest and most sophisticated battery storage facilities and are leading a £19m local energy market trial that will allow participants to buy and sell flexibility through a new virtual marketplace. Through Centrica Business Solutions we’re also helping customers to navigate the complexity of the market, bringing them end to end solutions that allow them to harness the power of distributed energy.
We’re working with a number of distribution network operators and National Grid on projects that we believe could play a key part in shaping the future energy landscape. There can be no doubt that the number and diversity of market participants, large and small, will increase as the potential for further participation in distributed energy opens up. We believe it’s essential that the industry works together to design a commercial framework that works for all stakeholders and in particular the end consumer. The results will be utterly transformational for the whole electricity industry and the millions of people reliant on it for their homes and businesses.
Last year we engaged in the first phase of the ENA’s Open Networks Project, attending the various market modelling workshops and responding to the consultations. We welcome the ENA plans to widen stakeholder engagement in 2018 and would encourage more market participants to join the process. Our engagement to date has been a positive experience – the ENA has been open for dialogue and we saw real changes being made to the project as stakeholders raised issues.
Of course, any new frameworks must ultimately benefit consumers, whether that be through reduced costs or opportunities to be rewarded for contributing to efficient use of the system. On that basis, we think it’s good news that Phase 2 of the ONP will include a Cost Benefit Analysis (CBA) and independent review of the different DSO models for DER participation. We support the ENA’s plans to include customer satisfaction, regulatory compliance, and sustainability within the CBA but suggest more economic analysis of how the different models support effective flexibility markets is also needed.
And so in conclusion, we’d say this is a good start but there’s a lot work to be done; more stakeholder engagement is needed and as always, there is scope for improvement. We look forward to working together with the ENA in 2018!