Smart Systems and Flexibility Plan: The industry responds

Yesterday’s developments from Ofgem and the Department for Business, Energy and Industrial Strategy on a future vision for the UK power system have garnered a significant response from the industry, the majority of which has been overwhelmingly positive.

 

Nick Boyle, chief executive, Lightsource

“There is no doubt that the future of energy and its distribution will need to serve homeowners, businesses and local communities alike. To create savings we need smarter ways to help them generate, store and control their energy. We are delighted that the government is taking steps to support this growing British sector. We can also apply this technology solution internationally which demonstrates how Britain is already leading in this area.”

 

Basil Scarsella, chief executive, UK Power Networks

“We are on the verge of a change as significant for electricity as the advent of broadband was for telecommunications. We are already transforming our networks to be smarter and more flexible, and are currently consulting on our vision for the smart grid of the future. Working together with Government, the regulator, academia and other stakeholders we believe this transformation will unlock significant benefits for consumers.”

 

Chris Hewett, policy manager, Solar Trade Association

“The solar industry in the UK is gearing up for the integration of PV panels and battery technology. Our research shows that a high penetration of batteries alongside solar power would reduce overall costs to the electricity system and allow the country to have cheap solar at the heart of its power system.

“As we have seen with solar panels, a favourable policy framework can drive down costs of technology very quickly and create markets. It is vital that the Government gets the charging, taxation and regulation of storage right from the start or innovations that will benefit the consumer risk being held back. Today’s announcements are a start but there is a lot to do and a clearer timetable is needed.”

 

David Hill, commercial director, Open Energi

“Our current energy system was designed for an era of large, centralised fossil fuelled power stations. The digitalisation of energy represents a huge opportunity to create a cleaner, cheaper, smarter system, and transfer enormous value to consumers. We welcome Government proposals to accelerate this shift but meaningful policy changes are needed across energy markets – including balancing services, the capacity mechanism and wholesale energy markets - to ensure equal market access between incumbents and new technologies.  Creating a level playing field for demand flexibility will help the most efficient solutions to emerge and unlock the benefits of technology innovation for the UK economy, businesses and consumers alike.”

 

Juliet Davenport, chief executive, Good Energy

“This is a fantastic move by government and an exciting moment for the UK’s renewables industry. To deliver the low carbon economy of the future we have to embrace a new, smart energy system and battery technology will be at the heart of that.

“Backing innovation in energy storage, as well as more support for offshore wind projects and electric vehicles, will not only attract investment into the UK, create new jobs and increase export opportunities, it will also make sure we have a healthy and greener economy and environment. The move to a 100% renewable future is possible.”

 

James Court, head of policy and external affairs, Renewable Energy Association

“The global market is quickly moving towards a decentralised model, relying less on large fossil generation and more on flexible and increasingly cheap renewable sources. More energy storage empowers this and will lead to a lower cost, lower carbon energy system that will benefit households and businesses across the country.  

“The launch of a battery institute will help guide next-generation storage technologies through the hazards that lay between a good idea in a lab and actual deployment in homes and on solar farms.”

 

Rob Marsh, partner, Norton Rose Fulbright

“This signals a positive move by BEIS with regard to the commitment to the Industrial Strategy. A significant change in the way in which electricity is generated, used and distributed, from residential through to large scale commercial is inevitable in the coming decade.  Battery storage will have a key role in this evolution of the energy sector and these announcements reinforce the message that the UK Government is keen to be at the forefront, which can only be a good thing.

“The move to smarter, responsive systems and the true scale-up of battery storage in the UK requires a clear regulatory framework. The outcome of Ofgem’s Smart, Flexible Energy System call for Evidence (out today) and National Grid’s Future of Balancing Services work, will be important in helping to secure the investment case for these systems in the UK.”

 

Jenifer Baxter, head of energy and environment, Institution of Mechanical Engineers

“These changes for consumers in generation and demand management are a positive next step for the electricity sector. It makes sense to encourage behavioural changes in this way.  Apart from potentially saving consumers money, it also allows us to make better use of our resources. The role of batteries in electricity storage is still emerging and it is important that research and development explore whether the materials used in batteries, from extraction to disposal, are sustainable and therefore the best solution for electricity storage.  It may be that other storage mediums such as gas, compressed air energy storage and water provide a more suitable and sustainable long term solution.

“This announcement addresses a very small part of the whole energy system, areas where we are currently seeing increases in oil use, such as freight and shipping require significant investment to explore alternative fuels, such as bio-methane and hydrogen. Continued development across the energy system from multiple renewable and low emissions technologies remains vital to making the best use of our limited resources and meeting our long-term emissions targets.”

 

Tim Rotheray, director, Association of Decentralised Energy

“This report is vital, setting out Government’s vision of a flexible power system that gives customers greater control over their energy and promotes cost-effective decarbonisation.

“The emphasis on removing barriers to market for demand response providers is particularly important to achieve these aims. Government and industry must now work together to ensure these actions are implemented effectively.

“The review of network charging is critically important. We need a rigorous review to ensure that local generators and flexibility providers are fairly compensated for the value they provide. Recent work on the embedded benefits has damaged confidence among the decentralised energy industry and this review needs to be holistic and focused on all energy customers.”

 

Helen Emmerson, partner at the law firm Gowling WLG

 "This represents a major step towards supporting decentralising power generation in the UK, with consumers winning on two fronts, both through savings on their energy bills and also selling power to the National Grid. Reducing pressure on the National Grid infrastructure – which simply doesn't have the capacity to handle the 21st century usage and data levels – is a vital component of ensuring the network remains agile enough to meet future demand.

 “However, these efforts need to be complimented by changes in consumer behaviour around energy usage that fall in line with the specifics of solar panel power, such as when it is most cost-effective to take advantage of it, in contrast to traditional energy consumption which obviously operates very differently. “

 

Sam Bright, energy lawyer, ClientEarth

“Flexibility is the word of the day as our energy system transforms. Reliable storage technology will allow renewable energy to prosper, and means we can reimagine how we use the grid. Storage means people and businesses can manage their energy use better – and, with the right incentives, more cheaply.

“New rules that mean households can easily produce and store energy and sell it back to the grid will also make our energy system more robust. Financial and political commitment to a smarter grid is long overdue and absolutely the right move for a clean energy economy.”