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Select committee: low carbon needs independent national system operator and local balancing

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The GB network should have an independent system operator to ensure that conflicts of interest do not arise, according to a new report from the Commons Select Committee on Energy and Climate Change.  The MPs said the change should be made to ensure no conflicts of interest arose between different arms of National Grid, which carries out system operator functions as well as owning the high voltage network in England and Wales, and part-owning interconnectors.

Committee chair Angus MacNeil MP, said: “National Grid’s technical expertise in operating the national energy system must be weighed against its potential conflicts of interest. The
Independent System Operator model has worked in the USA. It is time for it to be brought to these shores.”

The MPs also recommended a more active role function for the distribution network operators (DNOs) that own and operate low voltage networks across the country. They should have a distribution system operator (DSO) role, actively manage power flows on their networks and balancing supply and demand locally, the MPs said.
MacNeil added: “Local energy is here, with astonishing growth in generation connected directly to regional networks. Distribution Network Operators (DNOs) remain somewhat blind to their energy flows and passive in managing them. DNOs must transition to a more active role as Distribution System Operators so that they can use smart technologies to manage ever-more complicated energy flows.”

Lobby group the Energy Networks Association said the change from DNO to DSO would not come as a surprise to companies. DNOs had been extending their scope of action via pilot projects under the so-called Low Carbon Networks Fund and Network Innovation Fund schemes, and such activities would be the building blocks for more active network management, he said. He acknowledged that investors in the network companies would see a change in risk and reward profile, but he said the switch to DSOs had been the ‘direction of travel’ for some time and changes within the current price period would be incremental.

The Committee also recommended  that the Government:

  • speed up the deployment of smart meters
  • remove regulatory barriers to storage
  • set targets for biomethane and hydrogen deployment in the gas grid
  • establish a regulatory framework  to encourage investment in district heating and complement existing voluntary schemes in safeguarding consumers.

See the Select Committee report here.

Further reading:

What is the future for distribution networks?

How can European electricity networks ease the distribution bottleneck?

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Ofgem foresees ‘blurring of lines’ in future as DNOs take on system operation activities

 

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