Grant Elder of SSE talks about the power of new market presence
Fri 25 Feb 2022
John Bensalhia talks to Grant Elder, Head of IDNO and Director of Optimal Power Networks, SSE Energy Solutions, about its new market presence and how it can fit in that important gap in the IDNO market.
SSE Energy Solutions has launched its IDNO Optimal Power Networks and is now aiming to gain a market presence. Having got its electricity distribution licence from Ofgem in April 2020, this allows the company to own and operate electricity distribution assets up to 132 kV anywhere in Britain.
“The business went through an in-depth scrutiny from Ofgem as to whether we could have this licence,”
Explains Grant Elder, Head of IDNO and Director of Optimal Power Networks, SSE Energy Solutions; “We had a number of meetings with Ofgem to convince them that actually we saw a gap in the market that wasn’t serviced by IDNOs at the moment.”
He continues – “Typically, these are new build extensions to the existing network, so we’ll take a connection from the incumbent regional DNO network operators. An accredited Independent Connection Provider (an ICP) will build the network, we don’t build them – we adopt them, own them, operate them.”
IDNOs typically focus on smaller developments, fairly standard, low-tech unidirectional power flow networks. “We wanted to do something that was tied more to the SSE way of thinking,” says Grant. “The decarbonisation goals that SSE Energy Solutions has set itself, sustainability goals. A heritage of engineering capability of larger value engineering projects. There wasn’t really an IDNO that served that market, so we could see a gap in the market where if customers had larger power needs and large industrial commercial type developments.”
Grant gives the example of data centres: “Typically, a data centre would go to the incumbent DNO for its power and for its new network construction because they felt that only the DNO would be able to provide the engineering capability resilience that they require. But we, as an IDNO, felt that we could do that too – bringing in the many things that an IDNO does. We can put funding in, in a way that we can actually put a capital contribution in to the cost of the network, to take ownership of that. We can also look at design innovation: to have a bit more flexibility in our designs, perhaps than a DNO.”
“So it’s trying to bring the dynamism of a new IDNO company with the capabilities of a DNO, and pulling those together in a way that looks towards how we meet those sustainability goals as well.”
The data industry is growing very much like a number of other industrial and commercial sectors that we are looking at. One area that SSE has been majoring in at the moment is electrification of transport, for example: electrified bus depots now. “They are facing a similar requirement of needing power, resilience, a new power infrastructure…” says Grant. “We need to make sure that that power’s going to be there. That is where we come in – we can support the infrastructure, both financially and through design innovation. We will work with the current DNO with the customer to make sure that everything is right in terms of the design, timing, legal requirements, leases…”
Grant says that data centres and other industrial commercial users are power hungry right now. “There are a lot of projects across the industry that can’t go ahead because of the constraints on the power network. We’re looking at ways to ease that, to facilitate that, to squeeze more power out of restricted capacity.”
A notable new addition is the implementation of monitoring on the company’s networks. “There’s not many others that are doing that, certainly not at the level that we’re looking to do it,” says Grant. “Even the incumbent DNOs are just starting on this kind of data journey. We’ve got the first low voltage monitoring systems due to be going in this month. We’ll be backing this up with data analysis capabilities coming into our team. This can really help us to understand what the power flows look like, where are the pinch points and what can we do to enhance the network designs to make sure that things are running correctly and are as efficient as they possibly can be.”
“It’s almost a symbiotic relationship there, because we need data and data processing power to help us run our business. We will become a customer of the data centre to market as much as we are a provider, to some extent.”
There are a number of requirements for business clients. One of the biggest is cost, with customers being ever more cost-conscious. “Sometimes we’re talking bigger sums of money so potentially bigger savings from a more efficient solution,” says Grant.
Network resilience is another fundamental example. “For example, if a bus depot loses power, you’ve got hundreds or thousands of people who can’t get to work the next day. An electrified bus depot has a 24/7 power requirement and that’s something we are absolutely conscious of. We’ve got our control room and the monitoring that we’re putting in so that we can respond instantaneously to any issues there.”
Timing is also important on the delivery of the network assets for the building of a new data centre. “You need to know when it’s going to be in, when it’s going to be powered on, when the lights are going to be on,” says Grant. “We don’t build this ourselves – we work with independent connection providers who are accredited to build licenced networks. We work with a number of those, for example, there’s one in the distributed energy business that we’re affiliated with but we work with others across the industry too. It’s a learning process as well – the greater the diversity of companies we work with, the more we learn.”
“We’ve got adoption processes that we need to make sure that are in line with those timings – that we don’t slow things down or delay things. Liaison with the incumbent DNO is always time-consuming, but we’ve got people who deal with that, plus an in-house legal team that can advise land rights and agreements that we need to make the process seamless and timely and that it all happens without delays on our side.”
Another important consideration is sustainability. “We’ve all got a big role to play, particularly in our industry,” explains Grant. “Making sure that we can live our lives as we want to, but we’re heading towards net zero as quickly as possible. One of Ofgem’s goals is decarbonisation at the lowest cost to customers. Those two elements are absolutely key.”
“Our networks are generally neutral to the power that flows through them. If a customer wants to connect to our networks, we’ve got a licenced obligation to allow them to do that. But, through us, we want to make sure that our networks are absolutely ready to take renewable generation, that they can withstand the variability of renewable generation being connected there.”
“We know that customers have got their sustainability goals – they don’t want to be supplied to a diesel generator to make sure that their business keeps running, they want zero carbon resilience, and that’s something that we want to be able to facilitate. We need to be aware of that growth and therefore, we need to facilitate that.”
“Everything that we do has a sustainability question at the back of it – how is what we’re doing making networks fit for a zero carbon future?”