SSEN announces plan to devise industry-leading methodology to support neutrality
Scottish and Southern Electricity Networks (SSEN) has announced it is working with consultants Frontier Economics to devise a method that supports its role as a neutral market facilitator of a smarter, low-carbon and flexible electricity network.
As a signatory to the Flexibility First commitment, SSEN assesses smart flexibility service markets when reviewing requirements for building significant electricity network infrastructure. With Frontier Economics, SSEN is going further by commissioning a third party to help devise a method by which network reinforcements are compared with flexibility services, so that parties interested in offering flexibility services, can be assured of a transparent and level-playing field.
The increased proliferation of low-carbon technologies has unlocked opportunities for households, communities and businesses to interact with the electricity network in exciting ways. These technologies include small-scale renewables, electric vehicles, demand side response, battery storage and even energy efficiency measures. Households, businesses and communities can utilise these technologies to offer flexibility services, and be paid for doing so, while delivering wider cost efficiencies for everyone the network serves.
SSEN is committed to being a neutral market facilitator of the new markets created by the flexibility transition. The work with Frontier Economics seeks to equip SSEN with a decision-making framework that captures uncertainty and truly values the optionality that is provided by alleviating constraint with flexible services.
Flexibility services can be utilised by network operators to alleviate constraints, with the option of no-longer contracting for these services if the demand on the network reduces. In contrast, cost cannot be recouped on traditional network reinforcement in the scenario that demand reduces. SSEN has commissioned Frontier Economics to take the “optionality” resulting from future uncertainty into account in the development of a decision-making methodology.
Andrew Roper, Distribution Systems Operations Director: “I welcome this important project with Frontier Economics. It represents an important step in embedding SSEN’s commitment to being a neutral market facilitator of the flexibility markets created by a smarter network. This means more opportunities for households, businesses and communities that can all benefit from the flexible transition.”
“This work will establish a transparent and robust methodology for selecting between conventional asset-based solutions, flexible and other smart solution investments. This represents SSEN going further than merely an audit process, but ensuring the methodology used to judge flexibility is robust.”
Dan Roberts, Director at Frontier Economics said: “Exploiting the value of flexible resources will be critical as the sector evolves. As the scale and diversity of flexibility available increases, making sure we only commit to long lived investments when other alternatives have been properly considered will be critical to providing cost effective solutions for customers. Building real world uncertainty into robust decision-making frameworks is essential in this regard.”