A Shared Network Access Business Model for Distribution Networks

This paper proposes a new business model for distribution network operators (DNOs) - shared network access (SNA), aiming to integrate flexible demand in a cost-effective manner. The SNA scheme incentivises the incumbent DNOs to give up its exclusive access to the network, leasing the spare capacity or back up capacity to a licensed independent party. The ownership of assets will be retained by the incumbent DNO while competition will be introduced in the operation of the spare capacity. The independent parties who have license for SNA will act as secondary DNOs, tapping into the spare capacity in the network to provide flexible network services for flexible generation and demand, thus substantially reduce the network access cost for flexibility. This paper quantifies the potential benefit of mobilising spare capacity for flexibility network usage and discusses how the proposed business model can capture such value for each player. The results demonstrate that the competition brought by the proposed SNA can take advantage of the unused capacities in the existing network assets and be able to substantially increase their capability in integrating flexible demand and generation.