Commercial Solutions

As electricity demand increases and we move towards a low carbon economy, the way in which distribution Network Operators manage electricity networks in future needs to change. We are exploring how we can develop commercial arrangements with organisations and distributed generation owners to manage this increased demand on the network.

Find out more below about which projects are exploring commercial solutions.

When a customer makes a customer generation connection request, we will always offer the cheapest quote. However, if the nearest electricity connection point is at full capacity we may have to find another connection route. This could become expensive and potentially commercially unviable to the customer.

We have developed new commercial contracts for ‘interruptible’ electricity connections, which are cheaper than a ‘firm’ connection within the trial area. As of September 2013, we have issued 10 of these new interruptible contracts to customers wanting to connect their generation projects within the Flexible Plug and Play trial area. Two customers have currently accepted their offers. We expect these connections to be live in summer 2014.

The new ‘interruptible’ commercial contract means that through the Flexible Plug and Play project, we will offer you a point of connection on a constrained part of the distribution network within the trial area, and we will manage the output of your generator to ensure the network is kept within operational limits and the constraint is not breached. The generator output will managed using a smart system called Active Network Management.

Find out more about Flexible Plug and Play >>

 

We are trialling new commercial contracts which encourage industrial and commercial (I&C) customers support the network at times of peak demand, when called upon to do so, in return for payments.

These arrangements will be used to manage short-term challenges to the electricity network, deferring network investment and keeping down the costs of electricity distribution.

A number of business customers have signed contracts with our ‘aggregator’ partners, who form the contracts with the business customers. An availability payment is paid to a customer, followed by a utilisation payment each time they turn down their non-essential electricity use or switch to their own generation in response to a signal from us.

The findings from this trial will not only shape how we, and other electricity network operators, run our networks in the future, but will also help develop more innovative relationships with our customers.

Find out more about Low Carbon London >>


The project will collaboratively design and develop new commercial strategies and arrangements that will enable the enhanced flexibility of energy storage to be demonstrated using the full capabilities of the Smart Optimisation and Control System.

Synergies across a range of applications will be identified and trialled simultaneously, whilst capturing the value to the system in a more optimised approach. These flexible commercial arrangements and demonstrations will further add to the key learning outcomes that will help inform the future design of market products and services that make optimal use of storage, including services that may be procured by Distribution System Operators and Transmission System Operators in the future from third-party energy storage operators.

We are currently consulting on the kinds of Business Models that suit the ownership and day to day running of a storage device. You can read the consultation and have your say in our reports and downloads area

Find out more about Smarter Network Storage project >>