Lighting the way for DNO:DSO co-operation
We know we have a responsibility to our customers to deliver the lowest-cost, fit-for-purpose future electricity network across London, the East and South East of England. It’s one of the main reasons we established an independent Distribution System Operator (DSO) back in May 2023 – to maximise the use of existing infrastructure, using flexibility and energy efficiency to enable the energy transition for all.
But we need to do more than simply deliver on our promises. We need to take customers on the journey with us. Build trust. Not just say what we will do, but show them and our peers how we are doing it – starting with how our newly formed DSO will fit into the wider UK Power Networks landscape.
⚡ Introducing the DSO:DNO Operational Agreement
The DSO:DNO Operational Agreement is a document outlining how our Distribution Network Operator (DNO) and the legally separate DSO will interact and cooperate.
The DSO is responsible for ensuring there is enough electricity distribution capacity at the lowest cost across UK Power Networks’ licence area to facilitate the transition to Net Zero. It will achieve this through its three main roles – network strategy and local Net Zero, flexibility markets and DSO operations. The DNO, on the other hand, is responsible for delivering additional network infrastructure where this is justified, for managing connections to the electricity grid, for improving the health, reliability, and resilience of the network, looking after the safety of staff and public, and for delivering excellent customer service.
The DSO is expected to have a significant impact on the size and cost of the network required to meet our objective of delivering more than £400m in customer benefits from 2023 to 28. For the DSO to achieve this, it will rely heavily on data and support from the wider DNO. Similarly, the DNO will depend on the DSO to fulfil its obligations to customers and the regulator, Ofgem.
Mapping out how these two separate areas of the organisation will work alongside one another effectively identifies and addresses actual and perceived conflicts between the DSO and our network ownership roles or other business interests. This not only provides our customers with the confidence that we make investment decisions in their best interests, but promotes transparency and best practice across our industry.
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🤝Cross-DNO alignment
The development and publication of the DSO:DNO Operational Agreement is a key feature of our current business plan period from now until 2028. To promote comparison and alignment across DNOs across the country, the document has been based on Ofgem’s three DSO roles and baseline expectations:
We have also committed to publishing details of our adherence to the agreement, to promote transparency, and share practice across the industry.
💭 Let us know your thoughts
To strengthen vital trust and relationships, we welcome feedback from stakeholders for improvements to this agreement, which can be found on the Publications and useful links section of our DSO website.