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Ofgem awards National Grid and UK Power Networks NIC funding in a step towards a Distribution System Operator

National Grid and UK Power Networks have received £9.5m in funding from Ofgem for trialling a market solution that will better manage distributed generation in a step towards a Distribution System Operator.

From Press releases - 30 November 2016 12:00 AM

• National Grid and UK Power Networks partnership wins £9.5m through Ofgem’s Network Innovation Competition for new regional power market model.
• A world-first trial will maximise network capacity to connect more renewable energy and storage technology in the South East region.
• Trials could potentially expand to 59 other GB locations with potential savings of up to £412 million for UK consumers by 2050.

National Grid and UK Power Networks have received £9.5m in funding from Ofgem for trialling a market solution that will better manage distributed generation in a step towards a Distribution System Operator.

The pioneering whole system approach will help connect additional renewable energy and storage technology in the South East. The proposed solution will reduce the need to build additional electricity infrastructure in the area, saving consumers in the South East up to £1m by 2020 and £29m by 2050.

Renewable energy, such as solar panels and wind turbines, are becoming more of a feature in today’s electricity network. This is especially the case in the South East where distributed generation around London’s metropolitan area has increased significantly over the last five years.

The new regional power market trial will improve interaction between National Grid’s System Operator (SO), UK Power Networks’ role as regional electricity distributor and renewable energy generators connected to the distribution system.

The market will help renewable energy generators to offer their services to National Grid’s System Operator via a UK Power Networks’ Distribution System Operator (DSO) platform. This approach will also provide additional services to UK Power Networks.

Improving communication, coordination and developing new commercial frameworks will maximise network capacity by better managing system constraints, giving National Grid’s System Operator access to previously unexploited power. It will also introduce new revenue streams for renewable energy generators.

If successful, the regional power market model could be introduced to 59 other sites and potentially save up to £412m for UK consumers by 2050.

Richard Smith, Head of Network Capability Electricity at National Grid, said: “This is an innovative world first that will be a major step towards solving a challenge that impacts bill payers across Great Britain.”

Barry Hatton, Director of Asset Management at UK Power Networks, said: “We are delighted we have been given the go-ahead and we are looking forward to delivering this pioneering project with National Grid.  As highlighted in a recent Government and regulatory consultation, closer coordination with National Grid is required to unlock system-wide benefits and make the most effective use of distributed energy resources.”

Find out more about Ofgem’s Network Innovation Competition and the five other successful projects here.