Improving data sharing ‘critical’ for modern British energy system

Chris Martin of Pinsent Masons was commenting after energy regulator Ofgem opened a consultation on the proposed governance of new data sharing infrastructure (DSI) in Britain – a DSI that is aimed at revolutionising how data is shared across the energy sector. Ofgem’s proposals represent an attempt to “govern how data sharing activities are managed, controlled, and regulated” within the new DSI that is planned.

Currently, while data relevant to grid security and grid infrastructure is “regularly exchanged between energy sector participants to fulfil their roles in the energy system”, this is done through “a manual, inefficient and uncoordinated process, requiring complex legal agreements on an organisation-by-organisation basis”, Ofgem said, adding that it “results in data siloes and inconsistent data standards, as well as an increased risk of duplicated or misaligned information”.

Establishing a DSI in the energy system would enable the data “to be seamlessly ingested, formatted to an agreed … template … and then shared between the known participants”, it said.

Under Ofgem’s proposals, “a decentralised data sharing model” is favoured. It would mean that the relevant data is stored by the individual system participants, rather than centrally by a single body, and then made available to other participants in accordance with a “trust framework”. Ofgem said such a trust framework is needed to “allow energy sector participants to exchange data in a confident and secure manner”.

“Currently, data sharing agreements are used to establish privacy, security and ownership guidelines,” Ofgem said. “These are created on an as-needed basis between organisations, and often involve complex legal agreements that take time and resources to create. A trust framework will provide a scalable solution to this problem as it will provide energy sector participants with accurate risk management profiles, common user attributes, identity management, and pre-negotiated agreements based on use cases. This will establish the user’s confidence, right, and legality to share data between parties.”

“One of the main benefits of the DSI is that a trust framework is more flexible than a centralised repository’s rigid access and access controls,” it added.

Initially, the DSI is to be piloted for the purposes of enabling the energy system operator, distribution network operators, and transmission owners to coordinate more effectively on outage planning. However, Ofgem said that in time the infrastructure could be used for a much wide range of other purposes.

Chris Martin of Pinsent Masons, who was involved in an advisory group on the DSI governance project, said: “Enabling increased, standardised, data sharing in the energy sector is critical to support the shift to a more decentralised and digitally-enabled energy system. Britain, like many other countries, is seeking to become less reliant on a handful of fossil-fuel powered power plants for powering homes and industry and instead move to a more decentralised system where a larger number of distributed renewable energy generators, both large and small, have a more prominent role to play in supplying energy to the grid. That change brings complexity and poses challenges for managing and balancing the grid.”

“Improving access to up-to-date standardised data will help ensure there is better understanding of the way the decentralised system operates. When in mature operation and used to its full potential, the DSI could also enable the creation and operation of a virtual energy system, or digital twin,   which in turn would provide an invaluable tool for stress-testing the system virtually, better planning maintenance, handling outages effectively and managing peaks and troughs in supply and demand, as well as more generally ensuring the system is operated in an optimal and resilient way,” he said.

“With Britain’s energy security and net zero commitments at stake, it is right that Ofgem does not just leave it to the market to figure out governance solutions. The project needs to be seen in the light of the work previously undertaken by the energy data taskforce and the energy digitalisation taskforce and is relevant in the context of other initiatives where trust frameworks are being developed to support industry data sharing – including the ‘Stream’ initiative in the water sector, which Pinsent Masons has advised on. Trust frameworks also provide a solution to some of the challenges of centralised data sharing models, which can pose their own problems in relation to issues such as data confidentiality and integrity, competition law concerns and cybersecurity risk,” Martin said.

Ofgem’s DSI governance proposals are short-term in nature. They are intended to cover the period up until 2028 only. “An enduring governance model” is to be developed in due course for operation beyond 2028. In the period up to 2028, an ‘Interim DSI Coordinator’ is envisaged as overseeing the initial rollout and operation of the DSI. The interim coordinator role could, Ofgem said, be performed by it or an independent working group, but its preferred choice is the energy system operator.

The regulator’s proposals are open to consultation until 20 September 2024.