Meet our members – Phil Lawton, Core Group member, Resilience & Reliability Working Group member and Sustainability Working Group member
During my career I have been fortunate to work on many aspects of the electricity industry from testing customers’ meters, through distribution and transmission, to power station design. I even had a couple of years on secondment to the former Department of Energy and Climate Change.
Having enjoyed these many different perspectives, I was immediately interested at the prospect of another: the Customer Engagement Group (CEG) for UK Power Networks. As someone who has worked for regulated network companies from privatisation until 2015, I was more used to defending them than challenging them. However, I have found this new role refreshing and stimulating; a change is as good as a rest!
The early price controls were largely about driving efficiency gains within the network companies in order to deliver lower costs to customers. Then the need to deliver an improved customer experience was recognised and incentives were introduced around factors such as average customer minutes lost per annum. The CEG has an important role in ensuring that the views of the customer drive the design of such schemes and that they will lead to actions that deliver outcomes valued by the customer.
The forthcoming RIIO-ED2 price control will run from 2023-2028, so we also need to recognise its role in moving us towards net zero carbon emissions by 2050. If we are to achieve net zero, we must seize the opportunity to start developing the necessary networks during this period. I believe that history will judge us harshly if we do not. Hence, the next chapter needs to have a three-way focus: controlling costs, improving the customer experience, and developing the network to support net zero. So, what will we need from this network of the future? I see three main areas of development:
- There will be more low carbon generation and storage that will need to be connected to the distribution network.
- There will be increasing use of electricity for both transport and heating driving higher demands and a need to transport more electricity.
- To limit the necessary investment in network assets, we will have to make the assets work harder. This implies both having better monitoring of flows on the system and new ways of controlling the power flows over the network. We are very likely to see non-time critical demand such as electric vehicle charging being controlled to make best use of the renewable generation and network capacity that is available. Heat storage in the home can also allow us to decouple the delivery of heat by the network, from when it is used, allowing the same assets to deliver more energy. This is what is meant by the transition from being Distribution Network Operators (DNOs) to Distribution System Operators (DSOs).
The additional challenge of this price control will be to create incentives for the distribution companies that reward the most efficient mix of network investment and DSO activity to facilitate the connection of low carbon generation and new loads such as electric vehicles and heat pumps. This not only leads to difficult questions about what needs to be done, but also whether it should be paid for by existing or future customers.
We should not be fooled by the title ED2, this is definitely not a re-run of its predecessor ED1!