Government and Ofgem ‘pave way’ for smarter energy system

A consultation has been launched by Ofgem and the UK Government on how to develop a “smarter, more flexible and user-friendly energy system”.

Ofgem said the consultation document represents “the first major step in making sure consumers benefit from the exciting changes in the energy sector”.

The regulator said it builds on the position paper on flexibility it published last year which set out priorities including the roles of storage and aggregators, demand side response (DSR) for industrial and commercial consumers, network and system operation, and the extent to which distribution network charges need to change.

As part of their call for industry views, the Ofgem and the Government said they want local network operators to work quickly to connect electricity storage technology to the grid.

Ofgem said: “Local grid operators need to be smarter and work closely with National Grid to work out the best solutions for managing a system with increasing amounts of low carbon generation.”

The regulator added that a smarter energy system could save consumers between £13 billion and £40bn by 2050, quoting research by Imperial College London and the Carbon Trust.

‘Policy barriers’

Nina Skorupska, chief executive of the Renewable Energy Association, said: “The right questions are being asked but it’s now about the speed in which policy change can take place.

“Moving quickly by addressing policy barriers and prioritising these technologies in the industrial strategy would also help position the UK as an international leader.”

Ian McCarlie, a Partner at law firm Pinsent Masons, added: “Current regulations which stem from the Electricity Act 1989 are outdated and not adaptable to the pace of technological change within the energy markets.

“This can result in storage projects being charged twice by the grid operator, which puts this technology at a potential economic disadvantage.”
No consultation on embedded benefits review?

Meanwhile, Business & Energy Secretary Greg Clark appears to have ruled out a consultation on any proposals from Ofgem that may follow its embedded benefits review.

Clark was questioned on the issue in the House of Commons by Labour MP Kate Green.

He replied: “When it comes to energy it’s very important that we have regard to the costs that are incurred by consumers whether they are residential consumers or indeed businesses and that is why these decisions have to be taken to contain the cost that would be on the bill.”

> Take part in the consultation