Welcome to our final Capacity to Customers (C2C) newsletter in which we cover our closedown activities and summarise our key findings from the project.
Summary of key findings
In January 2015 we held our final dissemination event for C2C. Delegates from across the industry heard a series of presentations which examined the findings from the three-year project. The main findings can be summarised as follows:
C2C releases extra capacity and delivers economic and carbon benefits
The C2C team worked with academic partners to prove that C2C can unlock capacity for demand and generation and produced an implementation model that can be adopted by other DNOs. This shows that C2C unlocks real benefits for customers such as quicker new network connections at lower cost and cheaper DUoS costs.
Our industrial and commercial customers are willing to sign up to C2C contracts
Customers were offered a monthly payment or a reduced new connection charge in exchange for allowing us to manage their connection in the event of a fault. During the project we signed up 10 existing customers and 10 new connection agreements.
C2C improves our customers’ power quality perception
We surveyed customers on the trial circuits to monitor the effects of C2C technology on power quality. Our findings show that the introduction of C2C did not have an adverse effect on overall customer experience and in many cases improved customer perception of their electricity service.
Head of engineering Steve Cox said, “C2C is only the start of transforming how we offer new services and value to our customers. It’s great to see C2C already delivering benefits for our customers and shareholders. Over the next few years we will see many changes like this as our projects move from research to become business as usual.”
Please note our closedown report is out for consultation with Ofgem and industry peers. Please visit our website to see the draft closedown report. The final version will be circulated once the consultation process is complete
Customer engagement – commercial
To realise the capacity benefits that C2C can offer requires new and/or existing customers to adopt new forms of commercial arrangements. The trial area affected 12% of our customers, of which approximately 1200 were I&C customers. We contacted all our industrial and commercial (I&C) customers on the selected circuits directly to test their appetite for these new commercial contracts.
Project partner Impact Research gathered and collated a segmented database from our customer data systems then cleansed and enriched the data to provide a holistic and meaningful view of the trial area customers. We then issued a bespoke mailing containing a leaflet and video to all 1200 customers. A total of 180 questionnaires were completed by I&C customers from 12 July to 10 August 2012 either through online self completion or by telephone interview.
The research explored various contract elements including: the maximum number of managed interruptions per year; the maximum cumulative interruption duration per year; the payment method; the length of contract; the number of safeguarded days; and various levels of payment. Key findings from our research showed:
- Many I&C customers found the C2C concept appealing and 31% would recommend their organisation consider opting into a C2C contract
- Contracts need to be carefully tailored to the needs of individual customers, with a range of customisable contract elements offered to make them as attractive as possible
- An increase in financial reward outweighs all other factors particularly the inconvenience of longer durations.
A detailed summary of the research framework and results can be found in the Customer segmentation report.
Customer engagement – impact on customers
The change in operating arrangements on the C2C selected circuits could potentially increase the number of short duration interruptions experienced by all customers; as closing the normally open point (NOP) to form a closed ring will generally double the number of customers affected by a fault. But the new operating regime should deliver a shorter interruption to supply than under present operating arrangements. It was therefore essential to carry out extensive customer engagement throughout the trial to understand any impact on overall customer experience.
We carried out detailed customer research with a sample of customers in the trial area to understand any relative shift in overall customer experience, looking at power quality, interruption frequency and duration.
The results of this engagement showed that the change in operating conditions did not adversely affect customer perception of their electricity service. In some cases customers’ perception was more favourable for all three key power quality measures: frequency, duration and dips and spikes. Full reports on the research can be found in the Customer reactive post-fault report and Customer proactive power quality monitoring report.
We also employed an engaged customer panel to explore the extent to which customers understood C2C, its benefits, any perceived barriers to its success and whether domestic customers needed to be informed about it. This panel helped formulate effective communication plans, as a result of which we published and circulated a customer leaflet to all domestic customers on the trial circuits before the trial started. A detailed summary of the framework and key findings can be found in the ECP report.
Technology implementation and effectiveness
As part of the C2C trial we examined the benefits of an alternative operating model for existing EHV and HV networks which were enhanced with modern network automation functionality. Specifically at HV, C2C closes the NOP between two adjacent HV circuits to form a closed HV ring which in general releases the inherent ‘capacity to customers’. We retrofitted existing infrastructure with low cost proven remote control at key locations on the ring. This equipment allowed us to reconfigure the network in the event of a fault to allow us to rapidly re-energise customers’ supplies and minimise the need to activate demand and/or generation side response contracts. This capability not only reduced the incidence of DSR contract use but improved acceptability of C2C for all customers.
We tested the effectiveness of the technology by installing monitoring equipment on the trial circuits and taking real time data from the network. This allowed us to monitor the actual performance and informed a series of network simulations and modelling exercises.
The fault management system architecture and process that we designed and embedded was effective during the trial. We successfully demonstrated automatic network segregation and fault sectionalising for faults occurring on trial networks. We also showed that C2C has the ability to prioritise and restore multiple managed customers through a detailed testing schedule. The direct real time management of customer loads during the trial was successfully proven through a suite of automation solutions comprising various types of SCADA and through a range of EHV/HV/LV switches or moulded case circuit breakers (MCCB). These enabled us to control either all or part of a customer’s load in accordance with the managed connection agreement.
A detailed description of the sequence of events that will occur in the event of a fault outage on any of the relevant network assets can be found in the fault performance white paper.
Commercial framework for demand response services
To extend the benefits of C2C to all DNO customers, we developed new commercial templates to provide post-fault demand side response for new and existing demand and/or generation customers. The development of these new arrangements was supported by the substantial customer engagement exercise described above.
The survey provided a significant insight into an I&C customer’s appetite for C2C and is detailed in the customer segmentation report that was published on our website in June 2012.
Having completed this detailed engagement exercise with trial area I&C customers, the new contracts were brought to market and tested with new connection and existing customers. These contracts are proven modifications to existing industry framework contracts and are intended to offer significant benefits for customers over traditional demand side response formats by being less intrusive and provided at lower cost. These agreements were published on our website in December 2012.
These commercial templates were successfully applied to the 20 participants who signed up during the trial. For the ten new connections customers, the total customer contributions for a traditional solution would have been £7.84m compared £0.37m for a C2C contract – a saving of £7.47m for customers from avoiding the associated reinforcement costs. The customer types covered demand and generation managed contracts and ranged in capacity from 500kVA to 10,500kVA.
To achieve our target of 20 participants we trialled three routes to market:
Use of an agent or aggregator utilising a finder’s fee but using the DNO technology infrastructure and contract forms. Final contracts were bilateral between Electricity North West and the customer
Via an aggregator using their technology infrastructure and contract forms.
DNO direct engagement was clearly the most effective route to market offering a significantly higher sign-up rate and lower contract cost. In addition, customers valued the strong ongoing relationship with the DNO which reinforced confidence in C2C.
Evaluating the benefits of post-fault demand response – network performance
During the trial it was essential to quantify the technical performance of C2C to understand its long-term potential when deployed on typical distribution networks. Specifically we considered the impact of C2C operation on available demand capacity, DG capacity, electrical losses, power quality and fault levels.
Working in partnership with the University of Strathclyde we generated data and developed representative simulation models of the trial networks to understand the theoretical maximum limits and effects of C2C operation on the above criteria. We carried out system studies to establish the performance of the network under present and future scenarios. Particular attention was given to quantifying the benefits of interconnected (closed-ring) HV network operation over conventional radial (open-ring) operation.
The simulation studies of actual C2C circuits showed that C2C operation can release significant demand and DG capacity. On average, C2C operation can achieve up to approximately a 76% increase in demand and a 225% increase in DG, compared with defined base case scenarios. However, the results depend significantly on the individual circuit topologies, the thermal ratings of circuit sections, and load or DG locations. On average, interconnected C2C operation (with closed HV rings) releases more demand and DG capacity when compared to radial C2C operation (with radial HV feeders). Furthermore, a ‘holistic’ system approach is required when considering the connection of load or generation; other technical factors (such as primary transformer ratings) or non-technical factors (such as cost-effectiveness) may affect the maximum capacity which can be released by a particular HV circuit. For more information please see the Technical performance report
Evaluating the benefits of post-fault demand response – carbon impact
By releasing latent network capacity C2C should reduce carbon emissions related to reinforcement work; and by releasing capacity quicker, C2C should reduce emissions related to the connection of low carbon technologies. To evaluate this potential carbon reduction we worked in partnership with the Tyndall Centre for Climate Change Research to carry out detailed modelling and assessment.
The purpose of this research was to quantify the impact of C2C, compare this to traditional reinforcement and understand the major sources of emissions in each to better enable management of distribution networks.
The Tyndall Centre developed a robust and comprehensive methodology to inform the carbon impact model, taking inputs from the power flow assessment and associated economic modelling.
Our assessment showed that embodied carbon reductions are observed in the vast majority of scenarios and circuit combinations. In cases where C2C is not able to meet all the required demand/DG growth over the studied time period, it successfully defers the timing of network reinforcement. Operations impacts arising from change in network losses are sensitive to the existing composition of the network and the operating pattern of the additional demand or generation that is to be connected. As a result the benefits are very wide ranging and must be quantified specifically.
Increases in renewable distributed generation tend to reduce operations carbon impact from losses and C2C is therefore favoured as a method for capacity release. However, for the cases studied the net impact, whether positive or negative, are typically modest at less than 15% of the equivalent traditional solution net carbon impact.
For more information see our Final carbon impact assessment report.
Evaluating the benefits of post-fault demand response – economic
In addition to the technical challenges, we needed to identify a suitable economic framework that could properly quantify the different economic benefits and costs associated with C2C.
To be consistent with existing frameworks for the assessment of distribution network solutions C2C was assessed using the CBA framework introduced by Ofgem for the new RIIO-ED1 price control.
Working with the University of Manchester we demonstrated that C2C can be an attractive means to defer or even avoid costly line reinforcements and substation upgrades. From an economic perspective, both C2C configurations (radial or interconnected) are a better option than traditional interventions, particularly when demand growth is modest (or uncertain). Both configurations can lead to significant savings from investment avoidance or deferral.
From a power losses perspective, the interconnected C2C configuration is an attractive option, particularly in scenarios where demand is expected to increase significantly. The primary factors that make C2C beneficial have been clearly identified, namely: reference demand level, substation capacity, DSR availability and capital investment costs. The inclusion of C2C in a DNO’s solution set will help the DNO to optimise overall costs and will consistently outperform traditional solutions. These conclusions are also valid for connection of DG in the distribution system.
For more information see our Economic modelling methodology.
P2/6 security of supply
A key element of the C2C project was to explore the interaction between DSR services and existing industry policy, more specifically the network planning requirements in ER P2/6. ER P2/6 stipulates the security of supply to customers based on the aggregation of their demand as it appears on the network. In its simplest form the recommendation sets out the amount of capacity that must be available on the network for specified demand thresholds, so that demand can always be supplied when capacity becomes unavailable due to a fault or a planned outage.
As C2C uses this inherent latent capacity specified as a requirement of ER P2/6 for the connection of new demand, there will be instances following an outage and prior to network switching when customers’ unconstrained demand cannot be supported leading to a potential non-compliance under the current framework. For the purposes of the C2C trial a derogation from the requirements of P2/6 was granted for all demand groups supplying the trial circuits.
The remit of this area of work within the project was to present a recommendation for how DSR could be accommodated within ER P2/6 and to provide a consistent and practical approach for the industry to follow when assessing the contribution of DSR to security of supply assessments.
It was proposed that:
the short term an appropriate allowance for DSR should be taken into account when calculating group demand or by adjusting network capability. It is up to each DNO to justify and formally record its approach for each DSR connection.
It is up to each individual DNO to decide on the percentage of DSR that it will take into account when calculating group demand and this value should be recorded.
At this current time it is the view of the industry that for EHV networks the gross level of demand (group demand plus the responsive demand) should be curtailed to ensure that the system is able to maintain supplies to customers while responsive demand is disconnected.
The proposed amendments to ETR 130 can be found detailed in Accommodating Demand Side Response in Engineering Recommendation P2/6 – Change Proposal .
Keeping in touch
For more information, please visit our website or view our draft closedown report
Take a look at previous issues of our quarterly newsletter
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