An industry working group is set to start consulting on changes to distribution network supply standards – so-called P2 – that could see local standards on vary between areas. The aim is to reduce costs, both for customers and companies making connections, and make networks more flexible. But some argue that the change could degrade supply standards with more interruptions in some areas, create a patchwork of different approaches and slow new connections.
The consultation has been published by GB Distribution Code Review Panel P2 Working Group (DCRP P2 WG).
Options for the future include abandoning cross industry standards and relying instead on other distribution network operator (DNO) service requirements – for example on supply interruptions. In that scenario, requests to connect would trigger a cost-benefit analysis and the DNO would assess whether customers should pay for necessary reinforcement or accept the risk of poorer service levels. DNOs are required to carry out broad customer engagement in setting their business plans, but it is not clear how their priorities would be taken into account in the analysis, especially where it results in less secure supply in a small area.
Some argue that change is not required, especially as DNOs are able to deviate from existing standards if that meets broader network objectives. Among the options under review by the group will be a ‘no-change’ option, and one where current standards are simply updated, alongside a range of others
These range from a combination of cost-benefit assessment and ‘back-stop’ standards to removing all restrictions and allowing DNOs to make the assessment, described by one stakeholder as “getting the DNOs to do the hard work”. That option could be accompanied by higher financial penalties for DNOs that fail to meet customer service standards. One outcome – seen by some as the most likely – would set lower basic standards than currently exist and give DNOs the option to justify more costly reinforcement if it improved customer service.
“Companies getting set to connect also fear that relying more on cost-benefit analysis will mean a patchwork of different approaches across the 14 regions”
There is debate over whether using a cost-benefit approach would slow connections: DNOs have to respond to requests to connect within two months and requiring cost-benefit analysis could slow that. It is also not clear what types of connection should be encompassed in the revised approach. At the moment, P2 applies only to demand customers, but some argue that new generation and other assets such as storage connecting to the network should be covered in the same framework.
Companies getting set to connect also fear that relying more on cost-benefit analysis will mean a patchwork of different approaches across the 14 DNO regions, as well as in different areas within regions. That could increase the cost and uncertainty in the connections process for developers.
This article was first published in the April issue of New Power. Subscribers login to read.
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