“Getting Smart”: Smart grids and the move to DSO

Q&A with Julie Minns, Head of Customer Engagement at UK Power Networks

Over the last few years the energy sector has been undergoing a huge transformation. This has been fuelled by a whole new raft of innovations and challenges: smart meters, the development of distributed energy resources (such as solar panels and electric vehicles); the digitalisation of the power system and changing customer demands.

This transformation has called for an urgent need to upgrade the electricity grid: instead of the traditional power grid transferring electricity in one direction from power plants to customers, the smart grid can transfer electricity both ways.

In order to manage this fundamental change in the supply and demand of electricity, traditional Distribution Network Operators (DNO) are moving to a Distribution System Operator (DSO) model.  We caught up with one of our clients – Julie Minns, Head of Customer Engagement at UK Power Networks – to get her take on this exciting development for the sector.

Hi Julie, good to see you! This is a time of huge change in the Energy sector; for those less familiar with the concept of a smart grid, what do they mean for the everyday customer and the DNO industry as a whole?

The way we generate, distribute and use energy is changing – and electricity infrastructure needs to change too.  We liken the change to the one telecommunications went through in the early 2000s with the advent of broadband.  Back then, no one imagined we would have Facebook, Netflix or Airbnb, and it is the same for energy now.

We know that in the coming years, more and more people will own electric and driverless cars, use smart appliances in their homes, and generate, store and sell their own electricity, but do not yet know the apps and services these changes will enable.  One thing is for certain, our relationship with energy is set to fundamentally change.

Our role is to ensure our network is smart and flexible enough to enable customers to benefit from these new technologies. It is not as simple as ‘beefing up’ local networks with costly reinforcement work to install extra cabling and substations. To keep costs low for our customers, we are transforming into a Distribution System Operator by using a range of innovations that combine to make a ‘smart grid,’ and at UK Power Networks we are proud to have the country’s first Smart Grid Team to steer this.

How are UKPN collaborating with other DNOs and the Energy Networks Association to share best practice and plans for the move to DSO?

We collaborate with fellow DNOs through our umbrella organisation the Energy Networks Association, to share what we are all doing and share best practice. Under the ENA’s Open Networks project, we formally set out our shared vision of how the role of local electricity networks will change as the UK’s smart energy grid becomes a reality.

Innovation by energy networks has already enabled close to £1bn of cost savings that will be delivered between now and 2023, which shows the economic potential of smarter networks. The project brings together the leading minds in the UK energy industry, including all of the UK’s electricity network operators, including National Grid, respected academics, NGOs, the Department of Business, Energy and Industrial Strategy and the energy regulator Ofgem.

In UKPN’s FutureSmart Consultation Report, our CEO Basil Scarsella said about the move to DSO: “At a time of unprecedented change in our industry it is more important than ever that we listen, collaborate and share.  – from domestic consumers to suppliers, regulators to media organisations, new businesses to new flexibility providers, and technology companies to vehicle manufacturers.”

How have UKPN engaged with and listened to your stakeholders, to support the successful move to DSO?

Last year we published our FutureSmart consultation that outlined our vision for the future, proposing radical changes to enableelectricity networks to keep up with the needs and expectations of consumers, and outlining how people and their use of new technologies will be at the heart of the new electricity system.  We used a variety of communications channels and events to engage with stakeholders – especially those representing consumers – to ensure our vision genuinely delivered a smart grid for all.

We are due to publish the findings of our consultation in the next couple of weeks.

As Head of Customer Engagement, how has this impacted your priorities when it comes to customers and wider stakeholders?

I don’t think I really knew how transformative the changes in energy were when I joined UK Power Networks 18 months ago. I spent 13 years in the mobile sector and watched the birth of 3G and the launch of smartphones, and did not expect energy to rival that, but it does, and that has changed how we engage with customers and stakeholders.

As we move into a world where electricity is as much a commodity as it is a utility, we have had to widen our engagement beyond the energy sector and focus even more on innovation.

The change to DSO is already saving customers money and helping us to run our network more efficiently and effectively.  We are continuing to roll out flexible connections for distributed generation customers, we’ve introduced a fast-track application process for domestic energy storage, and we’re considering flexibility as an alternative to traditional reinforcement in our network planning. My press, public affairs and stakeholder teams have been very busy this year talking to different stakeholders about future energy.

There are risks and opportunities associated with any new technology; how are you communicating these to the various stakeholder groups?

We’re experts in electrical engineering, and there are hundreds of experts in other issues that we can learn from.  Our stakeholder strategy enables us to deliver better outcomes for our customers by listening and responding to stakeholder feedback, and by working with stakeholders to identify and respond to risks and opportunities.

It’s about being open and honest in a situation which is quickly changing and where nobody knows what other new technologies might emerge and what challenges they might present. For example smart charging will give customers a choice about how and when to charge their electric cars at home, and our aim is to provide a flexible distribution system that enables this.  But we also need to consider the needs of those customers who don’t have the ability to be flexible about when they use their electricity.  Working with expert stakeholders in vulnerability is helping us understand this issue further.

As was noted in alva’s Energy Affordability Roundtable & Webinar, DNOs are increasingly coming under the media’s – and the regulator’s – spotlight, especially as generation becomes much more distributed and closer to the end consumer. How is this impacting UKPN’s wider communications strategy?

Given the opportunities future energy offers consumers it’s really important that we communicate as widely as possible.  We are committed to remaining the lowest cost and most innovative electricity distribution network, and the more opportunity we have to make customers aware of what we do the better.  Over the last year we’ve increased our use of social media and we’ve focused other aspects of our business, for example how we support our customers living with dementia.

How are you measuring the impact of your strategy and keeping tabs on stakeholder conversations?

Stakeholder engagement is really important to us and we track what stakeholders tell us and what we’ve done in response throughout the year.  We use our monthly reputation insight report and the Live platform from alva to gauge public opinion and measure our reputation, it’s reasonable to assume that if we weren’t listening and responding to feedback, our reputation would decline.

We also benchmark our engagement against the international stakeholder engagement standard, and every year our regulator Ofgem reviews and scores our stakeholder engagement strategy.  We’re delighted that for the last two years Ofgem has ranked UK Power Networks in the top two.

For details on future events in alva’s Energy Trilemma series, please contact Tom Evans: tom.evans@alva-group.com, +44 (0)203 735 9794.

You can also watch the findings from the inaugural session on Energy Affordability here.