The following are seen as being key issues either to enable the creation of the DSO environment, or to enable and preserve the criticality of national infrastructure; specifically the economic stability and system security associated with the regulated networks infrastructure.
– Enabling legislation to permit DNO’s to identify DSO zones within their network boundaries, where supply/demand balance is intended to be conducted locally, or where there is a need to manage a set of network constraints not readily addressed by TSO arrangements.
– Enable DNO/DSO’s to sub licence DSO;s who apply for self-management of supply/demand balance or the provision of other network services. Such sub licensed DSO’s will be compulsory enabled, unless there is a compelling reason for this to be prohibited as a consequence of primary safety and security reasons. In all of these cases a network connection is perceived to be required – Islanded arrangements may be created, but ultimately they become private networks and a separate commercial arrangement should be facilitated for such an outcome.
– Such DSO environments will enable, through free market mechanisms, locally based technology to be deployed to enable local supply demand balance. These could include peer to peer trading, prosumer style methodologies.
Economic Stability and System security
– As this evolution takes place and assuming the extreme end of National Grid’s consumer power scenario, 50% of supply/ demand could be locally managed.
– This scenario has the potential to expose “stranded assets “ In the form of network assets either no longer required period, or no longer required of the capacity of their original construction. This scenario has the potential to destroy national infrastructure, which has a direct link to national social economic wellbeing at a national level and the stability of the nation socially.
The ability for a DNO to recover its costs for network infrastructure should continue to be permitted, through appropriate mechanisms for the maintenance and development of the whole asset base. The contribution to DSO enabling technologies should also be considered allowable in this way, where there is a direct link to them providing national security services.
Also DSO’s should be able to generate income, either at a DNO or sub licenced DSO level, based on the contribution they make to supply demand balance, or as a consequence of wheeling power through local networks (perhaps minimising large transmission costs, although these will need to be recovered somewhere). These local wheeling arrangements and use of local DNO networks can open up new market opportunities, which should ultimately be cost reflective of the assets being utilised coupled with the appropriate market rate being utilised for the generation source (local or nationally provided) being used.
There is no doubt there are complex issues in here to be resolved, getting it right first time will be unrealistic. Demonstration of new technology and the practical new markets will be one key step to de-risking the approach. However, enabling the DSO environment and continuing to stimulate new technology solutions, with new local market encouragement are fundamental progressive steps to more this forward.