PEP - innovation.ukpowernetworks.co.uk€¦ · Web viewNote: in 2022 above it is estimated that 1 new Flexible DG connection is facilitated from this project. This leads to a customer

Market-Based Curtailment Management (Gate B)Innovation Project Execution Plan

Innovation Project Execution Plan

PROJECT SUMMARY

Gate Approval Gate B

PEA - Project Title Market-Based Curtailment Management

Idea Reference (INO Number) INO_0259

Delivery Workflow A - Innovation Funded & Innovation Owned

Please Select ItemProposed Funding Route NIA

Please Select ItemOther Funding Route Specify

n/a

PEA - Nomination Project Contact(s) Rona Mitchell

Idea Development Project Lead Rona Mitchell

Idea Adoption BAU Business Unit Smart Grid

BAU Solution Owner (Accountable for Adoption at Gate D) Sotiris Georgiopoulos

PEA - Estimated DatesGate B

(PEA - Start Date)

02/09/2019 Gate C 01/06/2020 Gate D 02/09/2021

PEA - Project Duration 18 months if Live Trial does not go ahead. 24 months if Live Trial goes ahead

PEA - Project Delivery Budget £1000s (updated forecast for approval) £985,769

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PEA - Problem(s) - Need

There are limitations with the existing Flexible Distributed Generation (DG) connections that limit the ability of Distributed Energy Resources (DER) to maximise income from their assets.

There is an expectation that sometime in the near future, another subsidy will come in to cause a second rush of DG applications across our networks. Developing a future-proofed plan for accommodating this will lead to significant benefits to UK Power Networks and our customers.

Ofgem has asked Network Companies and the ESO to “lead on reviewing incremental improvements to the allocation of access rights (eg better management of connection queues, allowing generation who have non-firm connections to trade with others to reduce the extent they are curtailed, and enabling the exchange of access rights between users).”

PEA - Method(s)

The project aims to address the problems identified above by completing a feasibility study of a market-based curtailment method (MBCM) operated by the DSO. This would develop and test market based approaches for managing curtailment of generators connecting to the network, and signal where network reinforcement is the best value solution. The project will also consider how Market-based Curtailment Management can provide certainty to FDG customers increasing their ability to participate in national flexibility markets such as the Balancing Mechanism and Ancillary Services markets.

PEA - Scope – Deliverables to be linked to and further detailed in P6 Project Plan

Project is split into different tasks:1. Project Kickoff and Initial Market Design (initial cost-benefit

analysis and sizing the market opportunity)2. Data Analysis from existing FDG curtailment data3. Market Detailed Design (including stakeholder engagement)

a. Modelling market design(s)b. Sensitivity testingc. Engagement and trial design

4. Market Simulation (using ANM provider)5. Live Trial (develop and test live ANM solution with new market

rules) [possible – will go ahead if value can be demonstrated once tasks 1-4 are carried out]

6. Closedown (project write-up, cost-benefit analysis)

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PEA - Objective(s)

Key Objectives: Better understand the feasibility of a Market-Based Curtailment

Method, and what is required to holistically deploy one. This may include recommendations for what regulatory incentives are required to make this viable.

To quantify the value for customers and the DSO To simulate a Market-Based Curtailment Method and, if

successful, carry out a live trial Allow generators who have non-firm connections to trade with

others to reduce the extent they are curtailed.

Desired Outcomes: Progress towards a DSO Enable better management of connection queues. Improve the profitability for DER on our network and to facilitate

the low carbon transition of the UK economy Improve customers’ access to national and local flexibility

markets

Key Project Risks / Constraints

Dependencies: o Reliant on incumbent ANM provider to supply us with

historic curtailment data, and to develop a simulator for new market.

o Support required by a consultancy to carry out most tasks

o External stakeholders will be key to developing a successful offering

Seasonal Constraints: live trial must be carried out over the period identified as more suitable, time to be determined by curtailment analysis.

Other Risks: o ANM project using a lot of resources which may impact

availability to support this projecto Risk of delays due to unavailability of Smart Grid team

support. o Risk that a Market-Based Curtailment Method could

inadvertently lead to some ‘losers’ in the market. o ANM curtailment data is not accessible in a form that

can be interrogated and more time is requiredo Recruitment for live trial is below expectations, making it

difficult to prove the effectivenesso Customer revenue losses are larger than anticipated

due to errors in trial design or implementation MBCM is incompatible with current regulations Future regulation changes prevent this from delivering value

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REVISION HISTORY

Issue Date Prepared by Authorised Change Summary

1.0 17/07/2019 Rona Mitchell

Sections Altered None – 1st draft

Details


Sections Altered Cost and duration

Details updated based on quotes received from SGS and Cambridge Uni


Sections Altered Milestones,

Details Incorporating comments from Ian Cooper and Stathis Mokkas

4.0 Click or tap to enter a date.

Sections Altered

Details


Sections Altered

Details


Sections Altered

Details

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ContentsProject Summary........................................................................................................................................................... 1

Revision History............................................................................................................................................................. 4

Business & Commercial Case....................................................................................................................................... 6

Quality, Control & Project Planning.............................................................................................................................. 10

BAU Project Impact & Knowledge Sharing and Dissemination....................................................................................12

Stakeholder Engagement............................................................................................................................................ 12

Procurement................................................................................................................................................................ 13

Data Protection Impact Assessment............................................................................................................................ 14

Health, Safety & Environment...................................................................................................................................... 14

Gate Sign Off............................................................................................................................................................... 15

Appendix 1 – P6 Project Plan...................................................................................................................................... 16

Appendix 2 – Cost Forecast......................................................................................................................................... 16

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BUSINESS & COMMERCIAL CASE

Expected Cost to the Nearest £1,000

Gate A - BGate B - C (if

Total Cost >£500,000)

Gate C - D (if Total Cost>£500,000)

Gate D - E Total Cost

0 £553,845 £400,000 0 £953,845

Business Fit (Max 4)

Category Description

Network Flexibility and Smart Improvements

Choose an item.Using market-based approaches and dynamic allocation of capacity will unlock network flexibility and optimise the way we allocate and use the network.

Customer Service Improvement

Choose an item.Offering more options to connect to the network faster and cheaper will improve customer satisfaction and the service we provide to customers, provided that the benefits of the solution are clearly communicated.

Commercial Solutions for Easier Customer Access to Network

Choose an item.A Market-Based Curtailment Method will allow a more dynamic and efficient use of network capacity which goes beyond what was developed in Flexible Plug and Play

Strategic Benefit

Choose an item.If UK Power Networks, and DNOs generally, are unable to demonstrate their ability to manage access rights and otherwise address in the Ofgem paragraph above, it may be the case that National Grid ESO is tasked with managing these tasks. This puts our DSO transition at risk, and also could preclude us from the opportunity of profiting from managing a Market-Based Curtailment Method in the future.

As the project progresses, the question to ask ourselves is “why does the DNO doing this at scale present best value for money to customers?”

Regulatory Alignment – primary E6 category

Category Comment

Improve Connection Performance Allow faster and cheaper connections

Regulatory Alignment – secondary E6 category (optional)

Increase Network Capacity/ Optimise Utilisation

Choose an item.Allow better use of existing capacity.

Benefit Type (Max 4) Category CommentExisting Customers Choose an item.FDG customers will be able

to maximise income from their assets. Previous work from Baringa showed that curtailment cost could be reduced by 5-45%.

DER customers will be able to benefit from

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becoming more flexible by participating in a Market-Based Curtailment Method.

Connections Customers

Choose an item.Faster and cheaper connections. Assume 1 extra FDG connection is facilitated by this project, saving the customer £9.2m

DNO AllowancesChoose an item.If the DNO manages the MBCM, we may profit in some way.

- Choose an item.-

Proposed Expected Annual Benefits Nearest £1,000

2018 2019 2020 2021 2022 2023Total for

ED1

n/a n/a £0 £205 £9,612 £618 £10,435

Note: in 2022 above it is estimated that 1 new Flexible DG connection is facilitated from this project. This leads to a customer saving of £09.2m, in line with the average saving of our previous FDG connections.PEA - Please provide a calculation of the expected financial benefits of a Development or Demonstration Project (not required for Research Projects). (Base Cost – Method Cost, Against Agreed Baseline).

Years 2018 2019 2020 2021 2022 2023Total for

ED1

Annual Base Cost - - £0 £0 £0 £0 £0

Annual Method Cost (excludes project trial costs)

Estimate that annual method

costs will be negligible as the change to ANM system will be included in our

existing expenditure

-£300k(rollout costs)

£300k(rollout costs)

£0 £0 £600k

Expected Benefits (Annual) - - £0 £205k £412k £618k £1.23m

NPV: Base Cost – (Method Cost – Benefits)

Insert Base Cost less (Method Cost – Benefits)

£603,000

NPV Assumptions

Insert any commentary in support of the NPV assessment, including key assumptions and clarifications.

CBA Template

HYPERLINK "file:///\\ukpnnewfs01\Shared\Major%20Projects\SBR\Low%20Carbon%20Network%20Fund\Innovation%20Projects\01.%20Ideas\Flexible%20Connections%20Trial_INO_0259\Governance\Gate%20B-C%20-%20Idea%20Development\CBA%20and%20cost%20forecast"\\ukpnnewfs01\Shared\Major Projects\SBR\Low Carbon Network Fund\Innovation Projects\01. Ideas\Flexible Connections Trial_INO_0259\Governance\Gate B-C - Idea Development\CBA and cost forecast

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Cost Breakdown Insert Values to the nearest £1,000, detail resource requirements.

Category Cost

Project Manager (Innovation)Smart Grid SupportPMOCommsOther project support (IS/Finance/Legal/Procurement)Consultancy SupportANM SupplierAcademic PartnerSubstation MonitoringCustomer MonitoringIT development/integration costsDissemination WorkshopsRisk (10%)

£39,600£39,600£24,000£1,500£12,000£307,832£270,000£103,122£50,000£20,000£20,000£5,500£89,615

Total Forecast Cost £985,769

Cost Assumptions

Assume PM and Smart Grid team each will need 3 days/monthPMO 1 day/monthComms 1 weekOther support 1 day/monthSubstation and customer monitoring estimated. Will be more thoroughly planned at Gate C when site-specific information is available.

Cost Forecast

HYPERLINK "file:///\\ukpnnewfs01\Shared\Major%20Projects\SBR\Low%20Carbon%20Network%20Fund\Innovation%20Projects\01.%20Ideas\Flexible%20Connections%20Trial_INO_0259\Governance\Gate%20B-C%20-%20Idea%20Development\CBA%20and%20cost%20forecast"\\ukpnnewfs01\Shared\Major Projects\SBR\Low Carbon Network Fund\Innovation Projects\01. Ideas\Flexible Connections Trial_INO_0259\Governance\Gate B-C - Idea Development\CBA and cost forecast

Key Project Deliverables / Milestones (To be included within Partner / Supplier Contracts where applicable)

Deliverable Description Measurement Baseline Date

1. Task 1: ANM strategy report (MS Word)

2. Task 1: Detailed Project Plan

3. Task 1: CBA

1. Report defining a DSO strategy around market-based flexible connections. Including quantitative assessment on curtailment index. (Tied to an ICE commitment 2.19.1 and 4.19.1 for 01 Oct 2019)

2. To include deadlines for all other tasks in the project

3. Develop business cases for the different approaches for Market-Based Curtailment Method

1. Report approved by UKPN

2. Plan approved by UKPN

3. CBA approved by UKPN and reviewed by Academic partner

1. Sep-19

2. Aug-19

3. Sep-19

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4. Task 1: Gap analysis

5. Task 1: Site selection

6. Task 1: Stakeholder engagement

7. Task 2: Cleaned data set with associated statistics and analytical results (MS Excel)

8. Task 2: Curtailment Index

9. Task 2: A short report (1-2 pages) to provide a summer note for the Analysis and the Results

10. Task 3: Detailed description of market model (Market Procedures) in word document and accompanying Powerpoint slide deck;

11. Task 3: Report by academic partner

12. Task 3: Draft Commercial Heads of Terms (CHoT) (Word document)

13. Task 4: Functional Requirements for ANM solution (Excel spredsheet)

14. Task 4: Report detailing the testing regime (Word)

15. Task 5: Model completion and simulation study report (Word)

16. Task 5: Refined market design report, CHoT and Functional Requirements (Word)

17. Task 6: Trial report with Cost Benefit Analysis (Word + Excel CBA)

18. Task 6: Report on wider implications (Word)

4. Gap analysis between DSO capability requirements and different potential approaches.

5. Identify a set of high level site-selection criteria. Written as a separate document

6. Completed stakeholder engagement table summarising stakeholders engaged with and notes from each session

7. Existing FDG data in a form that can be interpreted and understood. To include curtailment estimation and opportunity sizing (It is part of the ICE commitment 2.19.2 and 4.19.2)

8. Curtailment index which can be made available to connecting customers to give them an idea of where they would like to connect. (This can be tied to 4.19.2 as well)

9. Word document

10. Word and Powerpoint reports giving a detailed description of the way in which the FDG market would work

11. Report giving feedback and thoughts on the overall approach for the market design.

12. Draft Commercial Heads of Terms that set out the key commercial interactions between parties

13. List of Functional Requirements to be used by the ANM provider to build the market simulation and operational ANM system

14. Report describing the tests that would need to be carried out to the ANM system and stakeholder equipment, with a schedule for carrying out those tests

15. Results of the simulation study, including analysis, interpretation and recommendations for modifications prior to trial go-live

16. Updates of the draft reports

17. Details of the simulation trial results, including a detailed CBA, description of the trial and findings

18. Forward-looking report revisiting Strategy Report and describing

4. Approved by UKPN and reviewed by academic partner

5. Reviewed by academic partner and SGS, approved by UKPN

6. Approved by UKPN

7. Analysis & results approved by UKPN

8. Reviewed by academic partner and SGS, approved by UKPN

9. Reports approved by UKPN


11. Report received by UKPN


13. Report approved by UKPN and SGS


15. Model tested and approved by UKPN; Report approved by UKPN




4. Sep-195. Sep-19

6. Sep-197. Dec-19

8. Jan-20

9. Feb-20

10. Feb-20

11. Mar-20

12. Feb-2013. Apr-20

14. Apr-20

15. Jul-20

16. Aug-20

17. TBC after Gate C


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19. PEA document20. NIA Annual Summary

March 202021. Gate C paper (for go/no

go decision on Task 5)22. Updated CBA (for go/no

go decision on Task 5)23. Updated pricing and

scope for Task 5 (if decision is ‘go’)

24. Gate D paper (for project closedown)

25. NIA Project Closedown after project close

implications for UKPN, its customers and the wider system

19. PEA document to upload on portal20. NIA Annual Summary as required by

PMO21. Complete Gate C paper for Steering

group22. Updated CBA to support Gate C paper

23. Updated work packages from suppliers

24. Gate D paper for steering group

25. NIA closedown for portal

19. Approved by Innovation Management

20. Approved by Innovation Management, Regulation and PMO

21. Approved by steering group

22. To support point above

23. Received by UKPN24. Approved by

steering group25. Approved by

regulation, Innovation manager and PMO

19. July 2019

20. April 2020

21. June 2020

22. June 202023. June 202024. TBC after

Gate C


Project Plan

\\ukpnnewfs01\Shared\Major Projects\SBR\Low Carbon Network Fund\Innovation Projects\01. Ideas\Flexible Connections Trial_INO_0259\Governance\Gate B-C - Idea Development\Project Plan and Scope

See Appendix 1.

QUALITY, CONTROL & PROJECT PLANNINGHas this technology been used in GB before?

Yes

Choose an item.Complexity

This project is not about technology. It is about exploring innovative processes for managing connection queues and reducing curtailment of renewable energy sources.

Project Delivery Resource Requirements

UKPN Resource requirements:Rona Mitchell – Innovation engineer & PM (3 days/month)Efstathios Mokkas (2 days/month)Sotiris Georgiopoulos (0.5 day/month)Tim Manandhar (0.5 days/month)James Mills (4 days/month)Vivian Li (0.5 days/month) Other Stakeholders: Richard Wilson and Saleem Naeem (Outage Planning & Network Control)

Rebecca Slattery – legal support for 1-2 weeks at the project startFlexible DG connection stakeholders & Regulation – Outage Planning, Steve Halsey, Dan Saker, Ross Thompson etc. Ad-hoc for key meetings and information.

Project Reporting Select Comments

Project will follow Standard Innovation Reporting Cycle and NIC Regulatory Reporting Calendar – See Innovation

Yes Choose an item.**as a NIA project it will not need to complete any NIC regulatory reporting

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Procedure SR 07 005 for standard reporting requirementsProject is required to provide further reporting information to IS/AM/external funding sources

No

Choose an item.n/a

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Project Organisation ChartNote: Please Create in word or other then copy and paste as picture (save and then insert)

Responsibility Summary/ Matrix (RACI)** (TDA stands for Technical Design Authority)

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BAU PROJECT IMPACT & KNOWLEDGE SHARING AND DISSEMINATION

PEA - Technology Readiness Level at Start - Current Level 4

Choose an item.Provide an explanation of current technology level and anticipated future level following project completion. e.g.Current = Bench scale researchFuture = Large scale

PEA - Technology Readiness Level at Completion - Expected 5

Scalability

UKPN has 9.3 GW of connected distributed generation. That is 32% of GB total (29 GW).

The instructions from Ofgem in their open documents are clear for the electricity networks to work together to find solutions to improve connection issues and overall operability of DG. Therefore, any successful outcomes as a result of this project will be directly relevant to all DNOs. However, as UKPN has a large proportion of GB DG, the majority of benefit will be to us.

High Level BAU Impact on BAU Business Unit

Impact Level Brief Description of Impact

ProcessMediu

m

Choose an item.Low impact to connections process and significant ANM process – however this will be bundled in with other significant ANM changes already happening.

People Low

Choose an item.System change will impact low numbers of people. However, the biggest changes will be to customers and therefore we need to be very careful that we minimise any unintended disruption to them.

Systems & Technology High

Choose an item.Significant changes to ANM system will be required to roll this out to BAU or even to take it to a live trial. However, this will be bundled in with other ongoing significant ANM changes.

Organisation LowChoose an item.Low changes to organisation reporting may be required.

PEA - Potential for New Learning – Provide Details of what the parties expect to learn and how the learning will be disseminated.

Learning Category Detail of Learning and Method of SharingInternal Continuous Leading the DSO transitionInternal Discrete Become the leading GB DSO.

External Continuous

As noted in Ofgem’s SCR launch statement, we expect to develop learning around how we can better improve the allocation of access rights to the network, with particular focus on distributed generation connections and those who are already on non-firm (‘flexible’) connections.

External Discrete Formal learnings will be shared in closedown report and at other relevant industry events.

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STAKEHOLDER ENGAGEMENT

Stakeholders Consulted in the development of this paper Input Detail

Stathis Mokkas

Sotiris Georgiopoulos

Tim Manandhar

Bob Currie (SGS)

Previous consultation – from Giulia Privitera in preparing the project in August 2018. These people have not been re-engaged with however it is noted that they will be involved in the project.

Insert the Stakeholders input in the development.

Key Engagement Activity / Medium Audience Purpose Responsible Person

Meetings, (Monthly, or as required)

1:2:1

External eventsEmailPhone call

Wider Project team

Project delivery

FDG customersAll project team (RACI)As needed to supplement other meetings

Review key documents, brainstorming workshopsKeeping on track, PM best practiceGathering informationGeneral updates/queriesAs needed to supplement other meetings.

UKPN + Consultant lead

All as appropriate

Consultant leadAll as appropriateAll as appropriate

PROCUREMENT

PEA - Project Partners and External Funding – Potential / Preferred Partners / External Funding

No external funding

Project partners:Consultancy support – Baringa (TBC)Smarter Grid Solutions and the ANM project consortiaAcademic partner – CsaP (Cambridge centre for science and policy)

Procurement Strategy / Approach

Consultancy to be selected following a mini tender on the framework agreement. The initial scores and prices indicate Baringa to be the winner.

Smarter Grid Solutions – incumbent service provider, will draw up another work package under the ANM contract (with some variation for NIA IP requirements)

CSAP – single-source due to their skill and knowledge from previous projects. Depending on value, may go for a three-bid.

Supplier / Partner Service Provided Status (Agreed / Pending)

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Baringa

SGS / ANM Team

Cambridge Uni – Karim Anaya & Michael Pollitt

Subject matter expertise, including desk-based analysis, and the design of the market arrangements and commercial products. Preparing of reports relating to the above. Support for customer engagement and learning dissemination as required.

Project support

Strategic direction and independent assurance.

Agreed – pending finalisation of MiniTender

Agreed – awaiting work package

Agreed – contract being drafted

If the Partner or is not covered by a framework seek Procurement Advice.

DATA PROTECTION IMPACT ASSESSMENT

DPIA screening section

Does the project involve processing Personal Data or monitoring of Data Subjects in public areas on a large scale?

No

Choose an item.DPIA already completed for this project and reviewed by the DPO.

Does the project involve Special Category Data (higher risk Personal Data that may be used to discriminate against the Data Subject)?

No

Will the project use Personal Data from or send Personal Data to third parties? There is a risk that the Personal Data could be used for a purpose that was not made clear to the Data Subject.

No

Will the personal data be used to make automated decisions about or profile the Data Subject(s)?

No

HEALTH, SAFETY & ENVIRONMENT

Summarise any higher risk activities that may require additional HSE requirement

No higher risk activities requiring special HSE considerations. This will be reviewed if Task 5 (live trial) goes ahead. There is a chance that on-site modifications may need to be made.

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Compliance with all Networks Business HSS and Operational Procedures is mandatory

Normal compliance with HSS 01 058 – Additional Health, Safety and Environment Requirements for Contractors Working for UK Power Networks – is required.

Compliance with Site Waste Management Plan and Environmental Risk.Normal requirements for Authorisation and craft competency apply.

Compliance with all UK Power Networks HSS procedures and adequate monitoring with on-site inspection by supervisory staff and project leads is mandatory.

Normal compliance with AIRline and operational control procedures applies.

GATE SIGN OFF

Gate Approval for: Market-Based Curtailment Management for a total budget value of £985,769 .This paper seeks approval to proceed beyond the Gate to develop the idea further.

Name Signature Date

Prepared & owned byRona Mitchell

05/08/2019Idea Generator/ Project Lead

Reviewed by

Zain HabibClick or tap to enter a date.Delivery Manager

Ian CooperClick or tap to enter a date.Opportunities and Bid Lead

Approved by

Ian CameronClick or tap to enter a date.Head of Innovation / Director

Sotiris Georgiopoulos

Click or tap to enter a date.BAU Solution Owner

Insert SSSS Director Click or tap to enter a

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date.SSSS Director

By signing this document, the signatory confirms that they have reviewed the contents and support a recommendation to provide the investment detailed to progress the project through the Gateway.The signatory also confirms understanding and acceptance of the BAU Impacts and the associated responsibilities of their Business Unit.

Sign-off is as per FAL governance levels.

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APPENDIX 1 – P6 PROJECT PLANSave as picture then insert

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APPENDIX 2 – COST FORECASTSave as picture then insert

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Documents

PEP - innovation.ukpowernetworks.co.uk€¦ · Web viewNote: in 2022 above it is estimated that 1 new Flexible DG connection is facilitated from this project. This leads to a customer