Frequently Asked Questions




Is the DSO running the (flexibility) market?



No, the DSO will not be running the market.

The DSO is providing the information that allows the market to understand what energy can be delivered through the network, where and how much that delivery will cost.

In certain situations, the DSO will use the market to procure flexibility services for the purposes of relieving congestion on the distribution network.

Can I access multiple markets?



The nature of the market is not the remit of the DSO as such, as the DSO will not be designing the market, but it is the intention that it should be possible for different parties to trade concurrently through various market platforms.

Who is responsible for the IT systems? Will we need multiple IT systems?



The IT systems that provide the markets with the visibility necessary for efficient operation will be the responsibility of the DSO. That does not presume that the DSO may choose for the purposes of efficiency to pool aspects of the required systems.

From an end-user perspective, as discussed above while the DSO will not be designing the markets, it is the intention that the market participants can participate in multiple markets, which indicates that some sort of compatibility or interoperability is required.

What is an SGAM?


Smart Grid Architecture Model (SGAM) is a tool for developing and visualising aspects of smart grid systems.  This is a standardised tool used in the energy industry and was developed by the EU to help better understand and visualise aspects of the smart grid.

Why is the DSO good for customers?



The DSO will allow new business models to emerge, allowing customers to do things that they are unable to do at the moment like purchase energy directly, stack their flexibility services, trade energy locally, enable new technologies and help the UK meet its carbon targets at best cost to the UK public.

For example, customers will be able to provide new flexibility services to the DSO, enabling them to discover new revenue streams while assisting in managing constraints in distribution network in a cost-effective manner.

Who is going to codify the market rules and governance structure?



The final output of our SGAM modelling will identify the interfaces and hand-offs between actors in the new DSO world.  These will in most cases require codification, often within the remit of existing entities and where this is not the case, we will look for input from BEIS and Ofgem, particularly with respect to market rules.

What is the timeline for the whole program?


The Open Networks project will have an enduring life extending into trials and demonstrations to allow the outputs to be prepared for implementation.  The expectation is that it will provide the industry with the information necessary to prepare for the transitioned implementation of DSO as appropriate through late ED1 and ED2.

Whose job is it to make sure the system remains reliable?


The DSO (on the basis that DNOs evolve into DSOs), in line with incentives and license obligations placed on the role.

Will the DSO be an aggregator?


The DSO role will be regulatory, as opposed to that of a commercial aggregator focussed on profit making. The DSO role will be one of co-ordination, i.e. ensuring that entities connected at the distribution level can easily provide services to both the transmission and distribution networks without jeopardising the security and resilience of the local network.

Should the DSO and DNO should be separated?



Ultimately the answer to this depends on the ability to design a DSO that is truly neutral, and that depends on the incentives and financial mechanisms that are put in place to fund the DNO and how they interact with the functions that the DSO performs.  

There are many people in the industry who believe that this neutrality is viable and desirable; the key point is that until the functions are understood in detail, no-one can say for certain.

The industry has however already supported some key decisions to increase the probability of neutrality being demonstrated, including the limitation on DNOs owning storage and a desire to be the market facilitator, not operator.

The Open Networks Project is focussing on defining the functions needed to allow this new Flexible system to operate, and only then will anyone have the knowledge to definitively say what the structure of the DNO and DSO should be. Similarly, the extent to which flexibility has permeated the distribution network will also have an impact on this judgement, and as a result what may be appropriate in the short term may not be the most appropriate solution in the long term.

For further information, please contact [email protected].