Our Transition to DSO

An increase in low-carbon distributed generation, electric vehicles, demand side response and energy storage are transforming our network, giving customers access to new products and services.
To accommodate the changes that will enable net-zero, we are transitioning from operating as a Distribution Network Operator (DNO), to become a Distribution System Operator (DSO). We are putting customers and communities at the heart of the process and ensuring the best value for money. In 2017, we published Supporting a Smarter Electricity System which outlines the principles we will adhere to during this transition.

Our DSO transition is underway, and our latest update can be read in Delivering DSO: A Progress Update, which details how we have put our DSO priorities into practice.

Our DSO priorities

Flexibility at the heart of smarter electricity

Our transition to DSO demands greater flexibility in management of the electricity network to ensure supply and demand are always balanced.

Flexibility services can be provided by households, businesses and communities in our distribution regions, who are paid to flex their demand or supply in response to constraint on our network. Their services could include small-scale renewables, battery storage, electric vehicles, demand side response and energy efficiency measures, to alleviate network constraint.

When an area of constraint has been identified, we can respond by reinforcing the network, or by using flexibility services. To help stakeholders understand how we make this decision and to embed neutrality in this process, we commissioned Frontier Economics to develop a tool that compares the cost of either option and assesses the benefit of optionality.

We use Constraint Managed Zones (CMZs) to identify areas where flexibility could be deployed to help manage the network in preference to traditional reinforcement. We now have several flexibility contracts in operation, which are helping to save money for our customers and reduce carbon emissions. On the Isle of Islay, we are successfully utilising low-carbon energy generation to manage the network. Within the first six months, this project had avoided 2,450 tonnes of CO2 emissions and saved customers £230,000 in the process. We have a significant procurement pipeline for flexibility services in both our licence areas.

Payment for providing flexibility services will commonly consist of an availability payment and/or a utilisation payment and while the values will vary based on service type, market liquidity, geographical location and network need, values will typically be around £150/MW or MWh.

We are seeking to procure flexibility services ahead of need from existing (or potential) flexibility providers.

The role of energy efficiency measures

SSEN has taken an industry-leading step in forecasting energy efficiency uptake in its distribution areas. Energy efficiency will play a key role in meeting net-zero. SSEN is committed to working with the local communities it serves to help them realise their net-zero goals. 

Innovating to drive the DSO transition

We are running innovation projects to understand how opportunities can be maximised from the transition to a smarter electricity system and how households, businesses and communities can realise its benefits.

  • Project LEO

    Project Local Energy Oxfordshire (LEO) is our flagship innovation project. Through LEO, we are seeking to replicate the conditions of the future electricity system to better understand relationships between stakeholders in the energy system and to inform how we should help manage the transition as a neutral market facilitator.

  • TRANSITION

    TRANSITION will help inform the requirements of the transition to DSO. It is working to develop a Neutral Market Facilitator platform that will facilitate the smarter electricity system.

The role of low carbon technologies (LCTs) in flexibility.

We are investigating where future areas of constraint are likely to emerge, so we can ensure the network is resilient. We commissioned a study from sustainable energy experts, Regen in 2020, examining the possible rate of uptake of low carbon technologies (LCTs) in both our licence areas, if the UK is to meet its net-zero targets. 

Your future electricity grid

We are working to understand how the demands on our networks are likely to change over the next decade. This will help us plan how we will support our demand or generation customers through network investment or flexibility. To support this process, we commissioned Regen to complete a set of future electricity scenarios for our Southern and Northern network distribution licence areas out to 2035. These studies are informed by National Grid’s Future Energy Scenarios.

Useful links

Useful resources

  • Electric vehicle strategy

    Download our electric vehicle strategy and find out how we're driving change.

  • Flexible connections

    We have developed a suite of alternative and flexible connections to allow generation customers to connect to our network as a temporary or permanent alternative to reinforcement.