Sunshine Tariff

Project description

Distribution Network Operators have an obligation to provide connections to customers in the most cost effective manner. However, due to the high penetration of distributed generation, several areas now require extensive reinforcement before additional generation can be connected. This can add significant time and costs to projects and can often make them unfeasible. 

Even with the introduction of alternative connections, where reinforcement costs are avoided on the acceptance of export constraint, the curtailment can be too severe for projects to be viable. 

As such there is continued interest in ways of connecting additional generation at minimal costs without compromising the security and quality of supply to existing customers. 

Scope and objectives

The project had 2 phases; the first investigated and reported on the commercial viability of the tariff, exploring current and future value streams to fund it. Whilst there was clear value to the generator, we also explored the value for both supplier and DNO. 

Phase 2 was the domestic demand side response trial. With a tariff subsidised by the supplier, we investigated the effects of the tariff on demand, exploring the extent and reliability of any increase. Four levels of intervention were trialled: tariff only; tariff and feed-back; basic automated water heating; and fully automated flexible load switching. The tariff was managed and administered by Tempus, however the customer engagement was conducted by the local energy cooperative WREN. 

We envisaged that this type of connection could be of particular interest to community energy groups, such as WREN, who don’t have the movability of commercial developers but would have the links to change customer behaviour. 

No generator was connected as part of the trial due to the inherent financial risk. Also the technical systems for regulating or disconnecting such a generator were not be trialled as the systems required were dependant on the knowledge this trial sought to gain.

Objectives were as follows:

Success Criteria

Details of the success and measurement criteria are tabled below.

For more details, please go to WREN’s website:

wren.uk.com/sunshine

Webinar

The webinar on the 7th February discussed the findings of the Sunshine Tariff project. This includes a quick introduction of the project and it's aims, the outcomes of project recruitment, analysis of customer shifting patterns and the next steps for WPD. 

You can download the FAQs here and view the video below.

Area of Works

The trial took place in Wadebridge, Cornwall, and used incentives and education to achieve a demand side response from domestic customers. 

Project Partners

WPD had 3 partners for the trial:

• Method(s)

  Phase 1: Feasibility

  Phase 1 of the project investigated the commercial viability of a new time of use tariff, the ‘Sunshine Tariff’ (off-peak pricing from 10am-4pm daily for 6 months of the year). 
  
  The study explored:

  • Potential sources of value for a Sunshine Tariff by looking at the current supplier market and use of system charging methodologies, 
  • Barriers to roll out in current markets, 
  • Current tariff viability,
  • Potential changes to the supply market and the DNO model in the future,
  • Future sources of value,
  • Future tariff viability, and
  • Permutations of an offset connection agreement, including the requirements for generator confidence in the offset and the control system, as well as timescales. 

  The outcome of the study determined whether phase 2 went ahead or not. A viable tariff in current markets was required to justify investing in a field trial.

  ---

  Phase 2: Trial Delivery

  Phase 2 was the domestic demand side response trial. The activities can be grouped into design and build; delivery; and analysis and reporting, as set out below.
  
  Design and build

  The design and build stage ran from November 2015 to the launch of the tariff on 1 April 2016, and included the following activities:

  • Final tariff structure agreed by all partners. 
  • Supplier backend systems and processes established. 
  • Engagement strategy and customer journey agreed. 
  • Media strategy and Q&A written and agreed by all partners. 
  • Sunshine Tariff recruitment launch. 
  • Data management systems put in place and tested, in line with data protection policies. 
  • Marketing material designed and published. 
  • Comparative baseline study carried out. 

  Delivery

  The Sunshine Tariff started on 1 April 2016. During the delivery stage, the following activities were carried out:

  • Review of sign-ups and population characteristics assessment. 
  • Technology installations. 
  • Maintenance of a complaints register. 
  • Online data platform. 
  • Regular billing. 
  • Feedback to subgroup 2. 
  • Project review and change request. 
  • Switch customers away from Sunshine Tariff.

  Analysis and reporting
  
  The final stage of the project was the data collection, analysis and reporting of findings, as set out below:

  • Manual collection of half hourly customer data. 
  • Provision of clean dataset including academic assessment of value. 
  • Post tariff survey and interviews.
  • Findings reports. 
  • Dissemination. 
• Lessons learnt

  A number of lessons were learnt, these are grouped by project management, recruitment, smart meters and data management, and dissemination.

  Project Management

  A number of lessons were learnt around project management: 

  • Allow twice as much time to appoint a supplier and have back-up partners in mind for if any drop out in the early stages of the trial. 
  • Also allow time for setting up a collaboration agreement between partners with clear roles and responsibilities. The agreement should include a plan of how to deal with a partner dropping out. 
  • Fully understand the requirements of the Customer Communications Plan before setting the timeline for the approval process. It took several months for all partners to agree the approach to customer engagement, which included agreeing a Customer Charter and Customer Journey. 
  • Engage Ofgem at an earlier stage to pre-empt questions on the Customer Communications Plan to help speed up the approval process. 
  • Establish an external/media enquiry process at an earlier stage to avoid confusion or mixed messages. This is particularly important when there are a number of different partners. 
  • Innovation around Non Traditional Business Models, is challenging is due to the rapid changes in wider market around the project. 

  Recruitment

  Lessons learnt suggest that testing the tariff and marketing techniques before launching could have provided feedback on what was both attractive and unattractive about the tariff. It is also important to monitor the market to check for competitiveness and either adjust the fixed tariff before launching or track against a variable rate to ensure the tariff reflects changes in the market. Having multiple suppliers could also help mitigate this issue, as there would be more than one Sunshine Tariff available in the market.

  Smart Meters and Data

  Tempus Energy installed a new model of meter, which had unique features and benefits such as being able to communicate in real time, compared to other meter providers that only send data consumed during half hour or wider time periods. 
  
  However, there were telecommunication problems that the meter supplier was unable to resolve, which resulted in difficulty retrieving the data from the meters. It would have been preferable to have used a meter that had been tried and tested in the UK. Therefore, data was manually downloaded directly from some of the smart meters at the end of the trial, which provided half hourly data, rather than minute-by-minute. This was a time consuming exercise that did not produce a full dataset. 
  
  The smart meter installation also took longer than planned, despite having an installation plan in place with risks and a mitigation strategy identified. There were issues with scheduling appointments and then connectivity problems with the meters. 
  
  The problems with the smart meters resulted in having a range of data sets, depending on whether data were transmitted by the smart meter or manually downloaded. Therefore, in order to compare data streams, a certain amount of data processing had to be undertaken, which was time consuming. 
  
  Ideally, the shift in consumption would have been measured against the average demand curve for each household from the previous summer. However, this dataset was not available and most of the smart meters were not installed until the start of the tariff. Therefore a comparative demand profile and a control group were established, against which a shift could be measured. 
  
  Learning around smart meter installation will be shared through the appropriate industry forums.

  Dissemination

  A media engagement strategy was compiled early in the trial with the goals of initially promoting the trial and then disseminating the learning. The trial received a significant amount of interest, in part due to national discussion about smart meters.

• Planned implementation

  The offset connection agreement will not be rolled out by WPD. In current market conditions, with the limited demand that can be shifted and the challenges of engaging and keeping customers, domestic DSR isn’t currently a feasible alternative to conventional reinforcement. WPD would expect this to be the case until certain key enablers such as half hourly settlement, widespread automation and the ability to gain value from multiple sources are common place. This would allow customers to access the full value of their flexibility with minimal intervention. As such, in order to continue delivering maximum value to the end customer, WPD will initially be focussing on transitioning the more mature, industrial and commercial DSR to business as usual.

• Documents and links

  Registration form

  Customer Communication and Data Protection Plan

  Customer Recruitment Learning Report

  The Customer Response

  Feasibility Report

  Summary Report

  Webinar FAQs

  Closedown Report

• Monthly updates

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