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Projects: Projects for Investigator
Reference Number	NIA_SSEN_0061
Title	HOMEflex (Household or Microbusiness Energy Flexibility)
Status	Started
Energy Categories	Other Cross-Cutting Technologies or Research(Demographics) 20%; Other Power and Storage Technologies(Electricity transmission and distribution) 60%; Other Cross-Cutting Technologies or Research(Environmental, social and economic impacts) 20%;
Research Types	Applied Research and Development 100%
Science and Technology Fields	ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering) 100%
UKERC Cross Cutting Characterisation	Sociological economical and environmental impact of energy (Policy and regulation) 30%; Sociological economical and environmental impact of energy (Consumer attitudes and behaviour) 70%;
Principal Investigator	Project Contact No email address given Scottish Hydro Electric Power Distribution plc (SHEPD)
Award Type	Network Innovation Allowance
Funding Source	Ofgem
Start Date	01 June 2022
End Date	31 May 2024
Duration	ENA months
Total Grant Value	£331,000
Industrial Sectors	Power
Region	Scotland
Programme	Network Innovation Allowance
Investigators	Principal Investigator	Project Contact , Scottish Hydro Electric Power Distribution plc (SHEPD) (100.000%)
	Other Investigator	Project Contact , Scottish Hydro Electric Power Distribution plc (SHEPD) (100.000%)
	Industrial Collaborator	Project Contact , Scottish and Southern Energy plc (0.000%)
Web Site	https://smarter.energynetworks.org/projects/NIA_SSEN_0061
Objectives	OverviewBuilding on the existing Flex Assure Code of Conduct and compliance scheme, this project sets out to:1. develop a new Code of Conduct for Flexibility Service providers offering services to domestic and micro-business energy users to participate in energy flexibility2. develop the documentation and governance structures for a voluntary compliance scheme to assess/monitor compliance with this Code of Conduct3. establish a mechanism for handling customer complaints4. consult on the developed Code of Conduct within the consultation framework of the ENA Open Networks ProjectThe project will draw on findings from relevant work by other bodies, including the Centre for Sustainable Energys Smart and Fair? project, to build considerations around inclusion, fairness, justice, and vulnerable consumers into the design of the standard and scheme.A steering committee will be established to provide input to and oversight of the project, with representation of key stakeholders.Development of Code of ConductDevelopment of a Code of Conduct will involve an initial exercise to map emerging business models and identify actors/relationships, and consideration of how to treat different parties under a Code.To write the Code of Conduct, we will then draw on a combination of previous work and qualitative research with domestic energy consumers, to be led by the Centre for Sustainable Energy (CSE).The Flex Assure Code of Conduct will serve as a rough guide for the structuring and drafting of a domestic flexibility Code of Conduct. Additional insights specific to the domestic energy context will be drawn from the ADEs Heat Trust scheme, a Code of Conduct and assurance scheme for heat network providers, active in the domestic context. Finally, insights from previous work such as the CSE Smart and Fair? project will feed into the drafting of the domestic flexibility Code of Conduct, to include considerations around fairness and vulnerable consumers.The drafting of the Code of Conduct will be led by the current Flex Assure Scheme Administrator, in collaboration with a Steering Committee, as mentioned above.Consumer engagementThe Centre for Sustainable Energy (CSE) will lead a two-phase programme of consumer engagement designed to:• ensure the drafting of the Code of Conduct is informed by perspectives and expectations of those domestic consumers most likely to be involved in domestic Flexibility Services at the early stages of market development• evaluate the potential impact on consumers (including vulnerable and fuel poor consumers) willingness to take up Flexibility Services as a result of the confidence instilled by the additional protections afforded by the proposed Flex Assure Domestic schemeThis engagement will be undertaken through a set of carefully structured deliberative focus groups. Two will be undertaken in the early stage of the project to inform the drafting of the Code of Conduct and two undertaken at the late stage of the project to provide an initial assessment of the potential impact of the Flex Assure Domestic scheme on market take up.Each focus group will involve consumers identified in the recruitment process (using insights from Smart and Fair?) as likely to be interested in and engaged with Flexibility Services at the early stages of their introduction to the domestic energy market. One of the two groups will be focused on consumers in vulnerable situations.Establishment of Governance Framework for Compliance SchemeWe will establish the frameworks for a voluntary compliance scheme on the basis of this new Code of Conduct for the domestic flexibility sector. To this end, we are able to draw on the design of and experience with both the current Flex Assure Scheme (for I&C), and on the ADEs Heat Trust compliance scheme, which can contribute insight around acting in a domestic energy market context, including insight on access for domestic customers to dispute resolution (e.g. through access to the Energy Ombudsman).The inclusion of a dispute resolution mechanism and potential access to the Energy Ombudsman will give domestic flexibility customers a means of recourse against flexibility service providers who provide poor service or fail to deliver. A table of infringement penalties could be established to compensate customers for poor service and the thread of liability ensured.Project Outputs- An open-source Code of Conduct document (including stakeholder consultation and implementation of stakeholder feedback). It is intended that this document would at minimum cover the following key themes, dependent upon the risk areas agreed by a steering committee comprised of a broad range of sector participants:o Sales and marketingo Technical due diligenceo Proposalso Customer contractso Complaints, violations and penalty system- Compliance Scheme governance structure (including proposals for establishment of a Scheme Oversight Committee)- Proposal for a customer complaint and dispute resolution service- Scheme member audit process- Development of the commercial model for sustained scheme operation- Indicative quantification of the potential impacts of a compliance scheme on consumer take-up of Flexibility Services and estimation of financial benefits for households and micro-businesses, including a comparison of affluent/less affluent or vulnerable consumers, to inform future scheme impact monitoring and evaluation- Plans for continued scheme development as the market evolves, development of a sustainable business model and test the interest amongst potential scheme members- Recommendations for how Open Networks can use the outcomesTimeframeThe whole project is estimated to take 2 years:- Year 1:o Desk-based research and domestic customer engagement (led by CSE)o Development of a new domestic Code of Conduct for Flexibility Service Providerso Stakeholder consultation on Code of Conducto Evaluation of individual and social benefits attached to HOMEflex- Year 2:o Development of governance framework for Compliance Scheme,▪ Develop business case▪ Develop audit process▪ Produce all associated scheme documentation including legal review, ready for scheme launch.▪ Develop proposal for Complaints/Dispute mechanism, and access to Energy Ombudsman▪ Develop processes for establishment and operation of Domestic Flexibility Scheme Oversight Committee, and proposal for Committee composition.▪ Develop proposal for implementation of Scheme secretariat (/expansion of existing Flex Assure Scheme secretariat)Report on expected outcomes and benefits for flexibility providers, DNOs, householders, landlords and micro-businesses, including financial savings, carbon savings, an equality/inclusivity assessment, Social Return on Investment. (SROI) figures and a fuel poverty alleviation score or other lifestyle improvement assessment, gather expressions of interest / commitment letters from potential Members of a voluntary compliance scheme. This project focuses on the development and publication of an open-source Code of Conduct and development of the governance frameworks, proposals, and business case for implementation of an associated voluntary compliance scheme. Due to uncertainties around the development of domestic flexibility markets over the next two years, it is difficult at this stage to make proposals for the commercial model and roll-out of such a scheme. The project team therefore proposes to incorporate this commercial planning as part of this project, to be taken forward following project completion, subject to the outputs and success of this project and the successful definition of a sustainable commercial model.The ultimate benefit of this project will be the development of an inclusive, healthy, publicly trusted and liquid domestic Flexibility Services marketplace. The project is not dedicated to a specific, single financial benefit to the customer, but rather a better customer experience throughout the whole cycle of a customers engagement with a Flexibility Services provider, the avoidance of customer detriment and unrealised income, and facilitation of better understanding of offers and a clear thread of accountability across a potential stack of service delivery partners.The benefits hereof must be seen in the context of the potential of domestic flexibility to contribute to the efficient and reliable operation of the electricity system. Findings from the first phase of the CrowdFlex1 project indicate a significant potential of domestic flexibility to help balance the GB electricity system, including the potential to reduce the GB system peak demand by up to 10% (6.8GW), and to provide up to 37GW of demand turn up flexibility, equating to 53% of the magnitude GB system peak. Insights from the Low Carbon London Project2 suggest that domestic flexibility could reduce the average costs of renewables integration in the electricity system by up to £11/MWh (with the marginal benefits two to three times higher, suggesting increasing benefits of demand side response with increasing integration of renewables). Moreover, findings from this project indicate a potential of flexible domestic demand to reduce the average system carbon emission rate by at least 5g/kWh. The extent to which this potential can be realised will depend on the level of consumer engagement achieved and sustained.Overall, according to a study by University College London, the residential flexibility market is forecast to contribute cumulative savings of £30.9bn for GB consumers by 2050. By building both consumer and DNO/ESO confidence in flexibility, this project will help to unlock that value.The HOMEflex project is expected to provide benefits to the GB ET and distribution systems through enabling greater and more reliable take-up of domestic Flexibility Services compared with a situation where the Code of Conduct is not in place and consumer trust is weaker and vulnerable to poor market practices.1 National Grid ESO 2021. CrowdFlex – Phase 1 Report. https://smarter.energynetworks.org/projects/nia2_ngeso001/2 Imperial College London 2014. Carbon impact of smart distribution networks – Low Carbon London Learning Lab. https://innovation.ukpowernetworks.co.uk/wp-content/uploads/2019/05/LCL-Learning-Report-D6-Carbon-impact-of-smart-distribution-networks.pdf HOMEflex will publish a model and recommendations for a Code of Conduct to help the provision of energy flexibility services in the domestic and small business market andto evaluate potential benefits.
Abstract	HOMEflex seeks to address gaps in fairness during the development of domestic Flexibility Services. HOMEflex aims to create an inclusive, fair, and transparent marketplace from the start. It will achieve this by developing a Code of Practice for Domestic Flexibility Services, including a framework and business case for an accompanying Compliance Scheme.If successful, HOMEflex could be used by procurers of Flexibility Services to give them the confidence they are engaging with a trustworthy vendor and by flexibility providers to demonstrate their credibility. HOMEflex draws on previous findings including Flex Assure for industrial and commercial customers, “Smart and Fair?” and CrowdFlex. This proposal resulted from engagement with Open Networks members and is seen as important for delivering domestic and microbusiness flexibility fairly.
Publications	(none)
Final Report	(none)
Added to Database	14/10/22