(5) Open-access, public data on system conditions and resources
The development of ICT infrastructure is
expanding the amount of data and information
available. Smart meters in buildings track the
profile of energy consumption every second,
offering a new source of information on energy
consumption and user behaviour. On the electricity grid, sensors and wide area networks
monitor the reliability of electricity grids, providing real-time information on network
conditions.
Market participants need a degree of access to
market information to facilitate a level playing
field for competition. The Council of European
Energy Regulators, for example, has identified
limited access to information as a key barrier to
entry for new market participants. Access to
information about distributed resources and network conditions may also grow in importance in
the future. This information may also provide a
foundation for new opportunities for system
balancing, as new participants could enter the
market and find more efficient balancing
solutions.
A data exchange could be part of an efficiently
functioning set of future energy networks but
would need to be managed carefully to mitigate
risks while being accessible. A data exchange is a
secure store of data, for example, on customer
use patterns, available distributed resources, local
prices and network conditions. The availability
of this data raises privacy concerns and a balance
would therefore need to be struck between
accessibility and protection. Use of data
exchanges will require adequate institutional
arrangements. For example, if DSOs, who participate in markets for electricity system services,
ran data services then gave themselves preferential access. In the long term, ICT developments
may make operation of data exchanges by centralised authorities unnecessary, particularly if
the trading of electricity shifts towards a
peer-to-peer level.
(6) Accommodating future innovations
Innovations in electricity networks include new
network structures and peer-to-peer electricity
trading, which may offer significant benefits.
New network structures, including microgrids
and fractal grids, have the potential to make
electricity systems more resilient to failure, as
discussed above. Peer-to-peer trading through a
distributed data management platform, such as
blockchain, offers the potential to lower transaction costs and reduce the role of intermediaries
in electricity markets.
These innovations can be facilitated with
arrangements required to deliver efficient networks, today and in the future. Most fundamentally, liberalised electricity markets provide a
supportive environment for the development,
demonstration and adoption of innovations.
More specifically, an institutional model that
aligns system operator incentives to public policy
objectives will be needed to mitigate any incentive for incumbents to block the spread of innovations. A model for control of decentralised
resources will also be needed to allow innovations such as new network structures and
peer-to-peer electricity trading the opportunity to
participate in electricity markets.
It is possible that over time these and other
innovations will drive or enable larger changes
that have the potential to restructure the electricity system more significantly. It will be
worthwhile monitoring new technologies and
business models so that policy and regulation can
respond appropriately, to realise value and
address risks.
(1) New network architectures
Microgrids and fractal grids are innovative network architectures. Both of these new network
architectures provide greater resilience than the
radial links of conventional distribution networks. Microgrids achieve resilience through
redundancy in generation, while fractal grids
576
S. Yaodong and A. Gillespie
The development of ICT infrastructure is
expanding the amount of data and information
available. Smart meters in buildings track the
profile of energy consumption every second,
offering a new source of information on energy
consumption and user behaviour. On the electricity grid, sensors and wide area networks
monitor the reliability of electricity grids, providing real-time information on network
conditions.
Market participants need a degree of access to
market information to facilitate a level playing
field for competition. The Council of European
Energy Regulators, for example, has identified
limited access to information as a key barrier to
entry for new market participants. Access to
information about distributed resources and network conditions may also grow in importance in
the future. This information may also provide a
foundation for new opportunities for system
balancing, as new participants could enter the
market and find more efficient balancing
solutions.
A data exchange could be part of an efficiently
functioning set of future energy networks but
would need to be managed carefully to mitigate
risks while being accessible. A data exchange is a
secure store of data, for example, on customer
use patterns, available distributed resources, local
prices and network conditions. The availability
of this data raises privacy concerns and a balance
would therefore need to be struck between
accessibility and protection. Use of data
exchanges will require adequate institutional
arrangements. For example, if DSOs, who participate in markets for electricity system services,
ran data services then gave themselves preferential access. In the long term, ICT developments
may make operation of data exchanges by centralised authorities unnecessary, particularly if
the trading of electricity shifts towards a
peer-to-peer level.
(6) Accommodating future innovations
Innovations in electricity networks include new
network structures and peer-to-peer electricity
trading, which may offer significant benefits.
New network structures, including microgrids
and fractal grids, have the potential to make
electricity systems more resilient to failure, as
discussed above. Peer-to-peer trading through a
distributed data management platform, such as
blockchain, offers the potential to lower transaction costs and reduce the role of intermediaries
in electricity markets.
These innovations can be facilitated with
arrangements required to deliver efficient networks, today and in the future. Most fundamentally, liberalised electricity markets provide a
supportive environment for the development,
demonstration and adoption of innovations.
More specifically, an institutional model that
aligns system operator incentives to public policy
objectives will be needed to mitigate any incentive for incumbents to block the spread of innovations. A model for control of decentralised
resources will also be needed to allow innovations such as new network structures and
peer-to-peer electricity trading the opportunity to
participate in electricity markets.
It is possible that over time these and other
innovations will drive or enable larger changes
that have the potential to restructure the electricity system more significantly. It will be
worthwhile monitoring new technologies and
business models so that policy and regulation can
respond appropriately, to realise value and
address risks.
(1) New network architectures
Microgrids and fractal grids are innovative network architectures. Both of these new network
architectures provide greater resilience than the
radial links of conventional distribution networks. Microgrids achieve resilience through
redundancy in generation, while fractal grids
576
S. Yaodong and A. Gillespie