Renewable energy deep dive biannual recommendations update 2 - Grid

Recommendation

We will step up our engagement with Ofgem to set out Wales’ investment needs, with a focus on retaining value within Wales. We will set up a joint-working group to look at options for supporting new, flexible grid connections for renewables and energy storage solutions.  

Key highlights / milestones

Key highlights since October 22:

• Continuing engagement including the Ofgem board GEMA’s visit to Wales, which included site visits to see evidence of key issues with grid in Wales.
• Progressing the Future Grids for Wales project including workshops with network officials on emerging insights, conveyed in a public webinar;
• Discussing with National Grid their process for developing route options for the proposed north-south transmission connection in Wales.

Next steps towards completion

Our priorities over the next 6 months include:

• Publishing the final report of the Future Grids for Wales project in May and establishing next steps;
• Continuing dialogue to inform the development of the proposed north-south transmission connection in Wales;
• Working with networks on opportunities around innovation and digitisation in the sector.

Recommendation    

Building on the Future Energy Grid Project, we will press Ofgem to create a Wales Energy System Architect to oversee:

a.    Demand side flexibility, domestic, non-domestic and dedicated, including energy storage
b.    The mapping of fuel (& transport) poor households against Distribution Network Operators (DNO) current & predicted constraint management zones (where demand side response/flexibility has greatest system value) with a view to socialised deployment of low carbon flexibility technologies to these homes and households 
c.    Smart solutions for transmission and distribution including the use of Artificial Intelligence (AI) to maximise the use of the existing network. Including development of requirements, funding and opening up to the market for innovation. Engagement and inputs required from across industry.
d.    Supporting business cases for whole system planning and bring together of plans across South, Mid and North Wales
e.    Competition for network build to decrease costs and accelerate build times
f.    Development of a detailed whole system plan covering transmission and distribution
g.    Celtic Sea offshore network design and onshore reinforcements.    

Key highlights / milestones    

We have worked with members of the Deep Dive group to further shape the concept of an Energy System Architect. Following the announcement of a Future System Operator for the GB system, we agreed that many of the functions envisaged for the WESA were likely to fall to this body, evolving from the ESO. We are working on proposals to focus thinking on remaining priority areas.

We have made significant progress with local energy plans following the appointment of delivery contractors for all regions. Plans are on track for completion by March 2024 and we are developing thinking on aggregating them with other work to develop the National Energy Plan. 

We are working with networks and businesses to develop a digital twin of Welsh electricity networks to maximise network uses.  

Next steps towards completion

Our next steps over the coming 6 months include:

• Continuing to develop thinking on the need for additional capacity to maximise the development of flexibility assets and the use of smart solutions, working towards smart local systems that retain benefit locally. This activity will seek to plug any remaining gaps in Wales as the FSO is established. 
• Actively looking for opportunities from our energy planning programme to develop innovative pilots around smart energy systems.