Matthew Lockwood, IGov Team, 11th January 2018
Yesterday a member of the IGov team attended the excellent (although somewhat male dominated) Conference on Electricity System Change: Flexibility and costs, organised by the University of Strathclyde, UKERC and the IEEE. The final panel featured Paul Bingham, recently appointed as Ofgem’s first ever Chief Engineer. One of the areas he mentioned an interest in was reviewing and updating industry standards for security of supply, which made a lot of sense within the context of a conference highlighting a system experiencing major changes and challenges at both transmission and distribution levels.
However, the record of such reviews points to one of the problems we face in bringing about a transformation of energy system in way that is rapid as well as secure – as one of the other panellists, Paul Gardner of DNV GL reminded us, the problem of climate change is urgent, and emissions reductions facilitated today are more helpful than those achieved tomorrow.
The issue can be illustrated by the story of the review of the security of supply rules for planning distribution networks, i.e. Engineering Regulations P2, currently in version 6 (i.e. ER P2/6, available from the Energy Networks Association). The idea that these regulations, which were last reviewed in a serious way in the 1970s and are deterministic (and therefore potentially constrain the added value of smarter operation), needed changing arose out of Workstream 6 of the now defunct Smart Grid Forum in 2012. At the end of that year, an open letter signalling the intention to review ER P2/6 went out to industry stakeholders from the Chair of the Distribution Code Review Panel. Phase 1 of the review started in January 2014, and completed in late 2016, with two options for a new model. Phase 2 started in early 2017, but will take 29 months to complete, meaning that it will report (if keeping to schedule) in late 2019. The DCode panel will then presumably have to consider the output of the working group and make a recommendation to Ofgem before a final, final decision is made, which is likely to run into 2020 (possibly 2021?).
So overall, the process of renewing the rules for distribution networks could take up to nine years. Obviously, it is important to get these things right, and there may be a struggle over the acceptance of non-deterministic planning rules in an industry used to low levels of risk, but this story does show why change in the GB system is slow. This matters because ER P2 plays an important role in network design and build, and as they currently stand pushes that design in the direction of physical asset build rather than smarter, market-based solutions, which is now the preferred direction for government and the regulator.
The story also shows the relevance of the codes governance structure – ER P2 is owned by the D Code panel, which is part of a governance arrangement that is doubly delegated away from government to industry via the regulator. It lies deep in the ‘engine room’ of the energy system, a long way below the Ministerial captains on the BEIS deck. There may be good technical reasons why the process could not be speeded up, but regardless of that, the governance arrangements in any case would mean that the government could not do anything to accelerate the review.