# Dso: Ofgem Regulatory Principles And Priorities Workshop

Louise van Rensburg Edwin Tammas-Williams Alex Walmsley Freya Kerle June 10th 2019

| Time   | Agenda Item                                   |
|--------|-----------------------------------------------|
| 9:45   | Workshop Registration & Coffee                |
| 10:00  | Introduction                                  |
| 10:15  | Detailed Day Overview                         |
| 10:30  | DSO functions and function providers Panel    |
| 11:00  | DSO functions and function providers Workshop |
| 12:15  | DSO functions and function providers Feedback |
| 13.00  | Key Enablers Panel                            |
| 13:45  | Key Enablers Workshop                         |
| 14:45  | Key Enablers Feedback                         |
| 15:00  | Break                                         |
| 15:15  | Future Insights Presentation                  |
| 16:00  | Workshop Wrap Up                              |
| 16:15  | End                                           |

## Introduction: Energy System Transition How The Dso Work Fits Into Our Wider Energy System Transition Work

Frances Warburton 10 June 2019

## Changes In The System Means Changes In Facilitating Change In Future Energy Systems Is An Important Part Of Our Forward Work Programme Regulation Our Strategy For Regulating The Future Energy System

Our aim is to ensure a regulatory framework that:

- drives innovation, - supports the transformation to a low 
carbon energy system, and
•
delivers the sustainable, resilient, and 
affordable services that all consumers need.  
We will deliver our strategy by: 1. Making best use of existing networks 2. Minimising costs of network expansion 3. Facilitating effective energy markets to deliver for consumers
4. Achieving **whole system efficiencies** across energy sectors and 
vectors
In addition we will:
•
Focus **innovation support** on the energy system transformation and increase alignment with other public sources of innovation funding 
•
Ensure **wholesale market arrangements adapt** to changing landscape
•
Providing a **predictable regulatory regime** which supports efficient investment and allocates risks efficiently. 
•
Ensure **consumers are protected**, in particular those in vulnerable 
circumstances

## Key Elements Of Our Work

Future Charging and Access (FCA) reforms 
•
Electricity Network Access and Forward-looking Charging reform ("**Access reform**")
–
Ofgem is leading a Significant Code Review (SCR) to develop improved access and 
forward-looking charging arrangements
–
In parallel, industry is undertaking a review of aspects of allocation of access rights, including improved queue management and the scope for trading;
•
Targeted Charging Review (the "TCR")
–
Ofgem is leading an SCR to develop new residual charging arrangements and reform the arrangements which give rise to "embedded benefits" 
–
in parallel, industry is bringing forward changes to ensure storage pays proportionate charges;
•
Balancing Services Charges Task Force (the "**Balancing Services Taskforce**")
–
Industry is leading a review of balancing services charges in parallel with the Access reform and the TCR.
Distribution System Operation/Electricity System Operator reforms
•
Clarify boundaries and mitigate conflicts
•
Enable competitive markets
•
Tender network reinforcement as neutral facilitators 
•
Embed whole systems coordination
RIIO price controls
•
Efficiency incentives through totex
•
Outputs, including flexibility / option value 
•
Innovation funding

## How We Will Deliver The Critical Components Of

Work area
Components of system transformation

## Future Charging & Access Reforms

Access reforms
•
Better definition of access rights
•
More cost-reflective forwardlooking charges
TCR 
•
Reduce distortions from residual 
charges
Balancing Services Task Force
•
Decide if BSUOS forward-looking or cost recovery

## Eso/Dso Reforms Clarify Boundaries & Mitigate Conflicts Enable Competitive Markets Tender Network Reinforcement As Neutral Facilitators Embed Whole Systems Coordination

RIIO
•
Efficiency incentives through totex
•
Outputs, incl flexibility/option value
•
Extending role of competition 
•
Embed whole systems approach
•
Innovation funding

## System Transition By 2023 Today'S Focus: Distribution System Operation

Distribution system operation The decarbonisation, decentralisation and digitalisation of the energy system means new activities are enabled and required to deliver network and system needs: 

•
DNOs will need to evolve, embed new tools and responsibilities. 
•
At the same time third parties are increasingly able to deliver solutions to network and system needs.
There is a role for policy makers to create the right environment so that new functions are delivered efficiently and effectively. At Distribution System Operation level, we want to:

1. Clarify boundaries and mitigate conflicts
for today
2. Enable competitive markets 3. Ensure network companies tender network 
reinforcement as neutral facilitators
4. Embed whole systems coordination
•
Set out our thinking so far
•
Describe our priority work areas
•
Present our early views
•
Outline how we will progress this work
•
Use your feedback to inform our policy development
•
Understand your priorities
•
Test the robustness of our analysis to date
•
Gain perspectives from a diverse range of stakeholders
Summer publication

## Overview Of Day

Morning focus
Time
Agenda Item
9:45
Workshop Registration & Coffee
Clarify 
10:00
Introduction and context
boundaries and 
10:15
Detailed Day Overview
10:30
DSO functions and function providers Panel
mitigate 
conflicts
11:00
DSO functions and function providers Workshop
12:15
DSO functions and function providers Feedback
13.00
Key Enablers Panel
13:45
Key Enablers Workshop

Afternoon 

14:45
Key Enablers Feedback

focus

15:15
Future Insights Presentation

Enable 

16:00
Workshop Wrap Up

competitive 

16:15
End

markets

## Panel Sessions

| 1.                                    | Clarify boundaries and    |
|---------------------------------------|---------------------------|
| mitigate conflicts                    |                           |
| 2.                                    | Enable                    |
| Key Enablers Speakers                 |                           |
| DSO functions and function            |                           |
|                                      |                           |
| Peter Bingham, Ofgem                  |                           |
| providers Speakers                    |                           |
|                                      |                           |
| Keith Bell, University of Strathclyde |                           |
|                                      |                           |
| Steve Atkins, SSE                     |                           |


Richard Dobson, ESC & EDTF


Charles Wood, Energy UK


Graham Ault, Smarter Grid Solutions

David Middleton, Origami Energy

Sotiris Georgiopoulos, UKPN  

## 1. Clarify Boundaries And Manage Conflicts Dso Functions And Function Providers Panel Session

Chair

Edwin Tammas-Williams, Senior Manager, Energy System Transition, Ofgem
Panel

Steve Atkins, DSO Transition Manager, Scottish & Southern Electricity Networks

Charles Wood, Policy Manager for New Energy Services & Heat, Energy UK

David Middleton, Head of Commercial Innovation, Origami Energy

## Distribution System Operation As A Set Of Functions

Effective Distribution System Operation is the delivery and coordination of a range of functions and activities. DNOs will embed some of these functionalities in order to facilitate efficient energy networks. 

Operations, real-time 
processes and planning
Markets and settlement
Long term planning
Switching, outage restoration and 
Network planning
distribution maintenance
Forecasting demand and generation 
Monitor parts of the Dx system under 
and DER
active network management
Connection studies and operation 
Supply of grid-operational services 
procedures
using DER assets
Identify DERs, ancillary service rqts. 
Integrated T-D planning
and operation restrictions
DER hosting capacity analysis
Data management and sharing
Emergency response planning
Coordination between T-D interfaces
Supply of grid-operational services 
Delivery of new investment
using DNO assets
Coordination of DER schedules
DER net local value analysis
Existing
•
Functional analysis drawn from outputs for the ENA Open Networks Project, the Future Power Systems Architecture model, The Helm Cost of Energy Review; Academic literature; internal analyses
Extended
•
Distribution system operation functions include variable depths of changes from existing 
operations.
New
•
Functions vary in their integration to DNOs.  
Aggregation of DERs
Design of principles of system access 
and trading arrangements
Operation of flexibility trading 
platforms and associated tasks

DSO functions and roles
•
DNOs and other parties will need to evolve in
delivering existing and new DSO functions
•
In some cases, it's not clear who is best placed - DNO and third party could deliver
•
"Grey areas"
•
Economies of scope with DNO core monopoly roles
•
Risks of monopolising delivery, or otherwise 
distorting competition
Examples where discussions have taken place
•
Supply of grid-operational services using DNO assets
-
CLASS

## Ofgem Need To Make Decisions  Around - Whether, And

•
Supply of grid-operational services using DER assets
•
in what circumstances, 
-
Modulating EV load control
-
Owning and operating storage

## Should Dnos Be Able To Provide These New Functions

•
Operation of flexibility trading platforms and associated tasks
•
Aggregation of DERs

## Steve Atkins (Dso Transition Manager) Scottish And Southern Electricity Networks Owns:

- two electricity distribution networks
- one electricity transmission network - +100,000 substations - +130,000 km of overhead lines and underground cables - +100 submarine cable links
We serve 3.5 million customers across one third of the UK's landmass.

## Introduction To Energy Uk

Energy UK is the trade association for the GB energy industry with a membership of over 100 suppliers, generators, and stakeholders with a business interest in the production and supply of electricity and gas for domestic and business consumers. Our membership covers over 90% of both UK power generation and the energy supply market for UK homes. 

New Energy Services & Heat is Energy UK's focus on emerging markets, including low carbon heat, low carbon transport, and a smart flexible energy system.

Charles Wood, Policy Manager - NESH
Charles.Wood@Energy-UK.org.uk

## Energy Uk Positions 1. Neutral Market Facilitation 2. Competition Driving Value

To ensure market confidence in the impartiality of NO and SO bodies, frameworks must be in place to ensure neutral market facilitation, including removal of conflicts of interest.

## 3. Near-Term Investment Confidence 4. A Clear Role For Network Assets

A clear and codified direction of travel is needed for investment decisions to be made now and ensure that enough flexible capacity is online by 2025.

Competition drives efficiencies and cost 
reductions for consumers, but market 
actors cannot compete effectively against 
paid-for assets.

As charging reforms and RIIO2 
development continue, it is important to 
ensure that active network management 
and increasingly controllable network 
assets are given a codified system role.

## Technology To Enhance The Value Capture For Energy Companies

Solutions deployed on the Origami platform Technology key to optimal value capture


Need to capture optimal value from assets across all value opportunities

Better decisions from real-time data & control

Value will change over time, perhaps unpredictably

Optimising many diverse assets across all service opportunities is complex
Technology deployed through partnerships Quality shareholders with evergreen capital

## David Middleton Head Of Commercial Innovation Leveraging Existing Entities Can Accelerate The Evolution Of The Dso …

| Platforms for    | Flexibility   | Optimisation   | Data     | Scheduling    | Security of    |
|------------------|---------------|----------------|----------|---------------|----------------|
| Sourcing         | Marketplace   | Exchange       | and      | Delivery      | Settlement     |
| Flexibility      | Portal        | Despatch       |          |               |                |

… but DSOs only secure flexibility for DNOs and are not otherwise a route to market for flexibility

1. Clarify boundaries and manage conflicts
DSO functions and 
function providers 

## Strategy & Workshop

Ofgem need to make decisions around whether, and in what circumstances, should DNOs be able to provide new functions

These decisions should: a) Reflect consumer interest b) Be consistent and resilient c) Provide **confidence to DNOs and third parties** about their roles and the 
regulatory environment
d) Be made efficiently
What is the objective of this work? 

Delivering these objectives more effectively What is not the objective of this work? 

New stances and positions what good outcomes are.

CEER (2019) New Services and DSO Involvement 

## Common Understanding

framework applies common circumstances or risk mitigations special justification and highlight some 

## Common Themes Emerge

| Vertical integration    | Unique competitive    |
|-------------------------|-----------------------|
| risks and benefits      | advantage             |

## Unique Access To Information Risk Or Perceived Risk Of Nonneutral Procurement

Efficiency gains
Unique access to assets, resources
Interaction with 
neutral monopoly role

## Where Commercial Functions May Risk Or Be Perceived To Risk Neutrality In Monopoly Functions Common Themes Emerge

…then Common conditions eg, If a commercial service uses assets paid for in price control then…

Blanket rules

How we implement will affect differently:
a) Reflect consumer interest b) Be consistent and resilient c) Provide confidence to DNOs and third 
parties about their roles and the regulatory 
environment

Status

d) Be made efficiently x)
Feasibility

Expectations
Common outcome focused conditions
Common understanding of risks

## Common Prescription

Common prescriptive rules

Use your workshop feedback
•
Develop our analysis - themes, conditions, implementation
Wider engagement
•
Summer DSO publication
•
Continues policy development
Implementation
•
Discrete decisions to be made (eg CLASS consulting early 2020)
•
Consider appropriateness & feasibility of broader implementation options

## Workshop Split Into Two Sessions With Three Questions Q1. Do You Think A Common Framework Is Helpful? How Would Implementation Options Affect Its Helpfulness?

Output:
(Strongly)Agree/Disagree with 

b)
Outcome focused or prescriptive conditions?
c)
Expectations or blanket rules?

Underpinning analysis
Q2. Have we identified the right 
common themes? 
Table 1 and 2 start, then after 20 minutes move to Q3
Output: a)
What do you agree with? 

b)
What don't you agree with?
c)
What have we missed?

Q3. What conditions do you think are appropriate?
Table 3 and 4 start, then after 20 minutes move to Q2 Output: 
•
Draft conditions corresponding to common themes

## Q1. Do You Think This Framework Is Helpful? How Would Implementation Options Affect Its Helpfulness? Output: A) (Strongly)Agree/Disagree With Common Framework Approach?

b)
Outcome focused or prescriptive conditions?
c)
Expectations or blanket rules?

## Q2. Have We Identified The Right Common Themes? Output: A) What Do You Agree With?

b)
What don't you agree with?
c)
What have we missed?

## Q3. What Conditions Do You Think Are Appropriate? Output: - Draft Conditions Corresponding To Common Themes 2. Enabling Competitive Markets Key Enablers For Dso - Panel Session Chair


Alex Walmsley, Senior Manager, Energy System Transition, Ofgem

## Panel


Peter Bingham, Chief Engineers, Ofgem

Keith Bell, Holder of the ScottishPower Chair in Smart Grids, University of Strathclyde

Richard Dobson, Technical Collaboration Consultant, Energy Systems Catapult & Energy 

## Data Taskforce


Graham Ault, Executive VP and DER Operators General Manager, Smarter Grid Solutions

Sotiris Georgiopoulos, Head of Smart Grid Development, UKPN & Chair ENA Open 

## "The Hardware, Software And All Associated Data And Interoperability

standards that are required to unlock DSO functionalities, support markets, and deliver consumer benefits through competition." 

hardware
software
•
Network monitoring
•
Data repository (DNO architecture)
•
Sensors (create & collect data)
•
Access portals (get info from networks)
•
Data exchange
•
Comms infrastructure (To transport data)
•
LCT interfaces 
(transports instructions to assets)
•
Forecasting (across planning, ops, real-time timescales; resource availability; constraints)
•
Planning tools (enhanced)
•
CIM
•
IEC61970
•
IEC61850
•
Cyber security - national infrastructure standards)
•
Engineering standards review
•
Vendor implementations 

## 2. Enabling Competitive Markets

Key enablers for DSO - panel session Peter Bingham, Ofgem Chief Engineer June 10th 2019

## Organisational View And Priorities

•
Ofgem is there for the energy consumer, not for picking winners
Opening siloed information 
•
Facilitating Network Access for Flexibility and Low Carbon Generation
•
Optimising Network Capacity Usage through smart charging 
signals
•
Investing in Smart Enabling Technology now to maximise network utilisation
•
Promoting Competition for Capacity in Networks
•
Developing Flexibility Markets and Platforms
•
Big Data - Enabling Flexibility Platforms, Smart Technology and 

## Behavioural Change

•
Smart Engineering Standards for Traditional Network 

Investment 

•
Promoting Resilience (Black Start from DG)
•
Local Energy ( Enabling energy transactions of energy resources
at a local level, community level and regional level)

## Key Enablers For Dso

stores can release value, unlock DSO functionalities, support markets, and delivery consumer benefits through competition
Hardware and software 
improvements will facilitate transformation.

# Dso Workshop: Ofgem Regulatory Principles And Priorities Key Enablers

Keith Bell ScottishPower Professor of Smart Grids at the University of Strathclyde and a co-Director of the UK Energy Research Centre http://www.strath.ac.uk/staff/bellkeithprof/
http://www.ukerc.ac.uk/

## The Ena'S Definition Of A Dso

A Distribution System Operator (DSO) securely operates and develops an active distribution system comprising networks, demand, generation and other flexible distributed energy resources (DER). As a neutral facilitator of an open and accessible market it will enable competitive access to markets and the optimal use of DER on distribution networks to deliver security, sustainability and affordability in the support of whole system optimisation. A DSO enables customers to be both producers and consumers; enabling customer access to networks and markets, customer choice and great customer service Doesn't  a DNO do this?

Shouldn't a DNO do this?

What are we left with that's different?

## Enabling Active Distribution And Optimisation Of The Whole System

- How much of the distributed energy resource is flexible? - How might it be encouraged to make itself available?
- For what purposes might it be flexed?
- What do you need to know in order to exercise flexibility in 
an optimal way?

## Enabling Active Distribution And Optimisation Of The Whole System How Much Do We Know About Der Now? How Much Do We Need To Know In Future?

Whose hands should be on the tiller?
- What do they need to know?
- Do they know why they need to know?
Need to answer these questions ASAP
•
Get codes in shape to enable answers
- Not just about local thermal limits - Not just about system frequency

If ICT systems can't be adapted to 
different answers to the tiller question, leave them until later
Sort out licences, incentives, etc. soon but later

## Dr Richard Dobson Technical Collaboration Consultant

Unleash innovation and open new markets to capture the clean growth opportunity

## Digital And Data Systems

Exploring how digital 
technologies and data can be 
used in the future energy system 
to help inform and shape the 
strategies and balance the 
complex risks associated with 
data privacy, data protection and 
cyber security.

## A Modern, Digitalised Energy System

and opportunity to attract new productive assets to the system.

## Approach Goal Principles Key Enablers For Dsos

Graham Ault, Co-Founder and Executive Director Smarter Grid Solutions is a DERMS (ANM) software vendor.

Combining economic optimization with coordinated autonomous control. 15 operational systems with 4 DNOs and >400 MW under Flexible Management. All types of generation, flexible load and storage in kW to 50MW range.

Products and solutions encompass international standards and requirements.

## Key Enablers For Dsos Dso Derms Platform Integration & Interoperability Architecture Based On Open Standards Advanced Algorithm & Applications Business Models End-To-End: Customer - Der - Field Device - Comms - Data - App - User Energy Networks Association Open Networks Project Key Dso Enablers

Sotiris Georgiopoulos Head of Smart Grid Development UK Power Networks

## Key Dso Enablers 2. Enabling Competitive Markets Key Enablers For Dso Strategy Distribution System Operation As A Set Of Functions

Effective Distribution System Operation is the delivery and coordination of a range of functions and activities. DNOs will embed some of these functionalities in order to facilitate efficient energy networks. 

Operations, real-time 
processes and planning
Markets and settlement
Long term planning
Switching, outage restoration and 
Network planning
distribution maintenance
Forecasting demand and generation 
Monitor parts of the Dx system under 
and DER
active network management
Connection studies and operation 
Supply of grid-operational services 
procedures
using DER assets
Identify DERs, ancillary service rqts. 
Integrated T-D planning
and operation restrictions
DER hosting capacity analysis
Data management and sharing
Emergency response planning
Coordination between T-D interfaces
Supply of grid-operational services 
Delivery of new investment
using DNO assets
Coordination of DER schedules
DER net local value analysis
Existing
•
Functional analysis drawn from outputs for the ENA Open Networks Project, the Future Power Systems Architecture model, The Helm Cost of Energy Review; Academic literature; internal analyses
Extended
•
Distribution system operation functions include variable depths of changes from existing 
operations.
New
•
Functions vary in their integration to DNOs.  
Aggregation of DERs
Design of principles of system access 
and trading arrangements
Operation of flexibility trading 
platforms and associated tasks

"The hardware, software and all associated data and interoperability standards that are required to unlock DSO functionalities, support markets, and deliver consumer benefits through competition." 
Key enablers for DSO are aligned and consistent with actions across industries and policy areas Ofgem has a clear remit to encourage the development of key enablers for DSO, and to ensure the equitable and suitable delivery of DSO in the interests of the energy consumer. 

Asset
Data
v
v
Data to share
•
GIS data
Data to share
•
Maximum demand index
•
Network topology (static)
•
132kV, 33kV Load flow models
Data unlikely to share
•
Health index
•
Criticality index
•
Locational headroom data (electrical engineering 
parameters MVA flows)
•
Probability of failure
•
Reinforcement planning data
•
Condition assessment data
Data examples
•
Connection queues
•
EoL estimates
•
Fault level data (constraints)
•
Single line drawings
NEW data to share
•
D-FES
•
Load forecasting tools
•
Direct Hosting capacity - usable - what can you connect) 
Associated 
Proposed "Whole Systems" Data Conditions, Principles & Stakeholder Needs
License Condition 
SLC 25
SLC 51
or codes of 
LTDS
NAIM
conduct
v
Sharing 
v
Not Defined
LTDS FOS Sharing (Excel)
But Data Exists (CBA)
Mechanism

## As More Silos Are Broken  Down We May Need A Mechanism For Data Coordination, Assurance And Security We May Need A Framework To Empower Dnos To Publish Relevant Data

Real Time
Data
v
v
Data to share
•
Network outage
Data to share to needs
•
Power flows and capacity
•
Network config
•
Network resource requirements
•
Working network topology
NB specific use cases only (ANM curtailment)
•
Resource availability under SCADA (gen, demand, resources 
contracted for 
operations)
•
Constraints and conflicts
•
Dispatch & control
•
Week 24 data
Not Defined
Not Defined
Not Defined
Not Defined

## 2. Enabling Competitive Markets Key Enablers For Dso Implementation

•
Network needs 
information
Inclusion of above parameters

## Maintain Industry And Research Engagement

•
Review of applicable parties
•
Working groups for 
development
•
Price control preparation

## Coordination With Industry

Harnessing Open Networks and network operator learnings and products outputs:

Flex lifecycle
Key enablers for DSO
•
System wide resource register
•
Whole system FES
•
Real-time data exchange & priority actions
•
Conflicts of interest and unintended consequences
•
Data exchange in planning 
timescales
•
TSO/DSO & DER data requirements
•
WS4 on whole systems: centralised info and dynamic LTDS
WS1B P4 CIM recommendation DNO/ESO learnings:

Maintain industry and research engagement

•
Protect the consumers and participants in flexibility markets
•
Delimit conflicts of interest
•
Maintain policy optionality
•
Encourage holistic data standards
•
Work with industry on ensuring accurate 
and accessible data
•
Delimit platform task breakdown, merit order and competencies to undertake tasks 
•
Review innovation project learning and integrations to DNO BaU
•
Undertake cost-benefit analysis of network visibility to inform RIIO-ED2 costs and volumes

## Strategy Implementation

Key Enablers definition and Ofgem
approach
•
Do you agree with the definition including hardware, software and data?
Priority Key Enablers
•
What are the most important key enablers?
•
Which data grouping is the most appropriate to focus on post planning data? [Be specific and realistic]
•
What is near-term vs long-term?
Interoperability as a strategic goal
•
Is interoperability key to DSO? Why/why not?

## Facilitated Table Discussions And Reporting: 25 Minutes On Strategy And

Programme of works and LTDS
•
Do you agree with the implementation approach from Ofgem?
•
Which changes are industry best placed to carry forwards?
Operational data for DSO
•
How should this be shared?
What would you do with key enablers in place?
•
What activities cannot be undertaken now that require key enablers?
Platforms for flexibility trading: 
Ofgem Future Insights

## Distribution System Operation As A Set Of Functions

Effective Distribution System Operation is the delivery and coordination of a range of functions and activities. DNOs will embed some of these functionalities in order to facilitate efficient energy networks. 

Operations, real-time 
processes and planning
Markets and settlement
Long term planning
Switching, outage restoration and 
Network planning
distribution maintenance
Forecasting demand and generation 
Monitor parts of the Dx system under 
and DER
active network management
Connection studies and operation 
Supply of grid-operational services 
procedures
using DER assets
Identify DERs, ancillary service rqts. 
Integrated T-D planning
and operation restrictions
DER hosting capacity analysis
Data management and sharing
Emergency response planning
Coordination between T-D interfaces
Supply of grid-operational services 
Delivery of new investment
using DNO assets
Coordination of DER schedules
DER net local value analysis
Existing
•
Functional analysis drawn from outputs for the ENA Open Networks Project, the Future Power Systems Architecture model, The Helm Cost of Energy Review; Academic literature; internal analyses
Extended
•
Distribution system operation functions include variable depths of changes from existing 
operations.
New
•
Functions vary in their integration to DNOs.  
Aggregation of DERs
Design of principles of system access 
and trading arrangements
Operation of flexibility trading 
platforms and associated tasks

Future Insights series - Ofgem has developed a view of the future for flexibility trading platforms. 
•
outlines the finding
•
presents an opportunity for open discussion
Content:
•
What is a flexibility platform?
•
The future of flexibility platforms
•
Regulatory issues -how could Ofgem respond?
•
Standards and harmonisation
•
Methodology
"A flexibility platform is an IT platform where the coordination, trading, dispatch and support services for flexibility markets take place."

## Platforms Are Made Up Of A Number Of Tasks Or Functions

| task                               |
|------------------------------------|
| Coordination                       |
| Alignment with external platforms, |
| markets and actors                 |
| Flexibility Procurement            |
| Match flex provider and procurers  |
| Dispatch and Control               |
| Dispatch flex asset and maintain   |
| system integrity                   |
| Platform Transaction               |
| Verification and payment services  |
| Settlement                         |
| Platform Market services           |
| Additional services (credit,       |
| qualification)                     |
| Platform Analytics and             |
| Network assessment, review and     |
| Feedback                           |
| improvement                        |

Tasks fit a tier level. We anticipate that numerous parties will fulfil different roles

•
Recognition that multiple platforms are likely to develop within and across
geographies
•
Coordination between flexibility procuring and selling parties
•
Shared standards or potential to trend toward a monopolistic role
Procurement facilitation
•
The task of 'shop-window' and 'matchmaking' buyers and sellers of 
flexibility.
•
Currently being taken up by GB innovative businesses.
•
Provides a for flexibility services.
•
Highly technical task of managing assets connected to the energy 
network.
•
Grid safety analysis role.
•
Requires network data.
•
Existing tools and SCADA systems may integrate in task.
•
DNO or alternative parties may be able to undertake this role in the future.
•
Services support flexibility trading
•
credit checking
•
Pre-qualification
•
Could be undertaken by specialists from other sectors.
•
Services support flexibility trading and balance settlement.
•
Could be undertaken by specialists 
from other sectors.
•
Improve the functioning of all platform tasks.
•
Data:
•
Inputs and analysis
•
Data privacy

## Revenue Streams, Stacking And Linkages

Overlap and coordination between tasks 
may hold synergies
- availability of information - sequential processes - key inputs from another task
Standards and harmonisation across platforms to:
•
improve the commercial environment
•
ensure consumer protections

## Interoperability For: Data Sharing Across Platforms

- keep barriers to entry low
- Drive innovation - Remedy market imbalance and tipping point

## Interoperability For: Asset And Product Characteristics

- Reduce search and transaction costs - Standardised products or filter assets based on procurer needs

## Interoperability For: Procurement Process

- Format & content of flexibility bids and offers - Single format for transactions can lower barriers to entry

## Flexibility Platforms In A Nonregulated Space Risks To Consumers:

•
a lack of coordination among the stakeholders causing duplication, efficiency losses, and **consumer costs**.
•
a lack of an independent arbiter or code of conduct leading to poorer consumer protection outcomes.

## Ensure **Protect Consumers** From The Potential Effects Of:

•
development of undue market power
•
partiality in dealing with own assets
•
non-competitive use of network knowledge
•
Restricted innovation benefits to consumers due to illiquid market offerings for flex platforms
i.
Cross-industry development to drive common standards and methods 
thereby reducing barriers to entry and lowering costs.
ii.
Develop data sharing protocols to allow access to network data.
iii. Monopoly power is a risk for flexibility platforms, whether delivered by the 
DNO or others.
iv. A shared vocabulary around flexibility market services, platforms and 
related issues, harnessing existing initiatives.
v.
Define and communicate the socialised and community benefits flexibility can deliver.