Frontier has produced an innovative evaluation framework which estimates the benefits to customers of innovative activities carried out by network operators.

The energy system is undergoing significant change. The transition to a zero-carbon economy requires electrifying a large proportion of transport and building heating, significantly increasing the levels of demand and generation that need to be connected to the electricity distribution network. Growing reliance on renewable energy sources like wind and solar power also creates new challenges for grid management to balance intermittent energy sources. In addition, the rise of electric vehicles (EVs) and the increasing use of distributed energy resources (DERs) such as home solar panels, battery storage, and demand-side response technologies mean that managing the distribution network is becoming increasingly complex.
 
This changing environment has required that network operators in Great Britain move from a traditional Distribution Network Operator (‘DNO’) role, which primarily focused on maintaining and upgrading infrastructure, to a more proactive Distribution System Operator ‘DSO’ role, where the focus expands to coordinating, optimizing, and integrating these diverse energy resources to ensure a stable, efficient, and sustainable energy supply.
 
Frontier has been working with SP Electricity Networks (SPEN) to develop a comprehensive framework to value the benefits of DSO activities. Aligned to best practice such as the UK Government's Green Book, this is the first time (at the time of writing) that both the benefits and costs of DSO activities have been evaluated in such a robust way.
 
Our calculations indicate that SPEN's DSO activities during the year 2024/25 will deliver a long-term net benefit to society of £563m. This comes from activities such as:

• Offering flexible connections, allowing generation, storage and demand to connect faster and with lower network reinforcement costs;
• the roll-out of LV monitors to allow SPEN to get more capacity out of its current network, reducing reinforcement costs
• the use of flexibility to manage planned and unplanned outages, reducing the number of times that customers experience a loss of supply; and
• contracting with flexibility providers when and where it is cheaper than carrying out immediate reinforcement.

Going forward, SPEN plans to use the benefits calculated by Frontier to prioritise its efforts, improve ongoing projects, and inform the development of nascent activities.

Click here to read the full independent report DSO Benefits Assessment