A CLASS ACT: WHY OFGEM’S CUSTOMER LOAD ACTIVE SYSTEM SERVICES IS GOOD NEWS FOR DNOS, CUSTOMERS AND THE RACE TO NET ZERO

John Langley-Davis, Head of Technology, Fundamentals

From April 2023, DNOs are being encouraged to deploy Customer Load Active System Services (CLASS), as part of RIIO-ED2. By enabling smarter balancing of voltages across the grid, CLASS is projected to cut £1 billion from customers’ bills over the coming years as well as significantly contribute to the UK’s carbon zero targets. It is also expected to deliver better quality and reliability of electricity supply to millions of users.

Ofgem’s ‘Regulatory treatment of CLASS as a balancing service’ consultation in March 2022 stated: ‘Our analysis shows that CLASS is a cost effective, low carbon technology that has the potential to reduce energy bills for consumers. (It) would have the additional benefit of rewarding consumers for sound investments made by the DNOs in the form of lower Distribution Use of System (DUoS) charges when DNOs earn profits.’ We believe that CLASS has enormous potential for countries across the world that are facing similar challenges of balancing their transmission and distribution systems.

Dramatic changes in how electricity is generated, distributed and consumed are the driving forces behind the development of CLASS. The 1950s model of centralised generation, with predictable delivery of power, is being replaced by an increasingly complex mix of de-centralised, low carbon renewable sources. Rapidly changing outputs from weather-dependent wind and solar sources necessitate increasingly rapid responses from the grid, to balance voltages, supply and demand.

Changing patterns of consumption are also having a growing impact. National Grid predicts 11 million plug-in electric vehicles by 2030. The replacement of gas heating with heat pumps will accelerate inexorably, with upcoming changes in building regulations. Add in the growing installation of domestic solar, small scale wind generators and localised battery storage, and the balancing act becomes ever more challenging.

Yet another factor is that many parts of the distribution network are already operating with loads for which they were not originally designed. For example, end-of-network wires and cables in rural areas typically present voltage control problems, owing to growth in demand and their distance from primary substations – plus the addition of distributed renewable generation installations.

Ofgem states that CLASS can make a major contribution to its Full Chain Flexibility vision for a secure, affordable, net-zero system. It said: “The results of Cost Benefit Analysis (CBA) indicate that the economic net benefit of CLASS is expected to be strongly positive across all regulatory options and deployment scenarios. CLASS is a competitively priced technology.” Ofgem added that allowing DNOs to deploy CLASS is a departure from its policy that DNOs should not undertake activities that can be performed by third parties, as it is effectively a Distribution System Operator (DSO) role.

But it concluded: “The circumstances in this case lead us to conclude that it is in the consumer interest to take an alternative stance. Only DNOs can provide CLASS and our updated assessment suggests that the net economic benefit is likely to be significant. Prohibiting CLASS would narrow the set of choices available to the ESO and mean consumers faced higher electricity bills than they might otherwise do.”

This is a vision for a world where all connected resources can respond flexibly to available energy and network capacity – and make it easier to bring more renewable generation online, whilst keeping costs down for consumers.

The benefits of CLASS for DNOs are comprehensive, in terms of efficiency, flexibility, reductions in operating costs and the need for network reinforcement – all of which translate into lower customer bills and better service.

As the name Customer Load Active System Services implies, CLASS is a methodology for actively controlling voltages, to balance loads on the grid. The hardware comprises voltage control units, linked to control rooms dashboards, where software is to used to adjust voltages as required.

Voltages can be increased or reduced to maintain permissible levels, by amounts that are imperceptible to consumers. One of the advantages of this is that customers’ electrical and electronic equipment will run at the voltage for which it was designed, which saves energy, reduces carbon and extends service life. It also means DNOs are delivering voltages at levels which are consistently within regulatory limits.

So how did CLASS come into being?

CLASS originated in 2015 as an Electricity North West Limited (ENWL) innovation project, funded through Ofgem’s Low Carbon Network Fund (LCNF). It demonstrated that by remotely managing transformers and circuit breakers at primary substations to change voltage, DNOs could reduce or increase power demand and absorb reactive power.

Electricity North West installed voltage control relays in its grid substations, linked to its Control Centre. An advanced network management system enabled the network to respond, in real-time, to requests from National Grid.

Before the full rollout, the company successfully ran trials on 60 primary substations – around 17% of its network and 485,000 customers. Data on voltage and power quality was collected and analysed, to quantify the effects of the trial on the regional and national electricity networks, as well as customer electricity supplies.

Since 2016 under RIIO-ED1, Electricity North West has been allowed to use CLASS to sell balancing services to the National Grid Electricity System Operator (ESO), through remote voltage management at substations. We believe the decision on CLASS in RIIO-ED2, running for five years from April 2023, will actively encourage DNOs to deploy it more widely, in competition with several other flexibility services that will be needed to meet the full scope of the ESO’s future balancing service requirements. One of the additional attractions of CLASS is that provides a new model for DNOs/DSOs to generate revenue by expanding their services to the TSO.

Electricity North West’s Engineering and Technical Director Steve Cox summed up the company’s development and implementation of CLASS as: “A great example of technology that delivers real value to customers, DNOs and National Grid” – enabling it to upgrade and modernise its entire voltage control system, increase the operational integrity of its tapchanger control scheme, and future-proof it to embrace further evolution of the network.

The roll out of CLASS demonstrated there was no need to replace transformers unless they were end-of-life, as only the voltage control parts of the system needed upgrading. CLASS could be implemented using Electricity North West’s existing SCADA substation RTUs (remote terminal units), enabling it to initiate a range of automatic actions to help balance the network, including: disconnecting one of a pair of primary substation transformers, tapping transformer tapchangers to reduce/increase demand, and • introducing tap stagger as a means of providing absorbing Volt-Amps Reactive (VAR) power.

Electricity North West’s experience has shown that CLASS can influence system loads and voltages across a wide area, enabling it to respond to rapidly changing network conditions and support the system in response to signals from National Grid. Immediate load, voltage and VAR responses are provided from the network to support the needs of the Transmission System Operator (TSO). The installation proved that a complete, cost-efficient, future proof and active voltage management solution across its whole network could be achieved with minimal impact on existing operations.

With CLASS rolled out across the network, DNOs are equipped to handle the increasingly complex voltage implications of distributed renewable generation: from facilitating their connection to the grid without disruption, to providing immediate responses to fast-changing levels of intermittent supply. CLASS similarly makes it easier for operators to manage spikes and dips in consumer demand, while minimising the need to call upon short term operating reserves (STORs), which in some forms are carbon-intensive.

The key challenge facing the electricity industry is how to adapt a transmission and distribution grid designed in a bygone era, for a future with very different demands upon it – and do so without the crippling expense of reinforcing or replacing large parts of it. How do we take the infrastructure in which we have already invested billions, and make it fit to deliver electricity that is available, reliable, sustainable and secure – all while keeping costs low for customers who are already struggling to pay their bills?

CLASS is not the only answer. But enabling network operators to balance supply and demand, by smarter management of voltages, is a technological leap forward that has the power to benefit everyone.

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