The UK faces large challenges in order to deliver a sustainable, affordable and secure power supply. This will require substantial investment over the next two
decades. Technology, known collectively as the Smart Grid, can help deliver
this at much lower costs as well as resulting in a more flexible energy system. Successful deployment of the Smart Grid could result in savings of £19bn by
2050 and GVA of £13bn and exports of £5bn by 2030. In order to deliver a successful Smart Grid industry requires strong strategic leadership, increased consumer engagement and a comprehensive policy and regulatory framework that not only incentivises but prioritises innovation.
This Call for Evidence provides welcome clarity on Government’s long term
intentions, which alongside the upcoming Emissions Reduction Plan and
Industrial Strategy will drive the successful transition towards a low carbon
economy. Allowing the UK to secure prosperity and competitiveness alongside
delivering energy resilience and environmental benefits cost-effectively.
By focusing on flexibility and realigning towards a whole systems approach
Government has sent a strong signal that dealing with the energy trilemma is no longer about trade-offs between the three pillars. Instead we are starting to see acceptance that the trilemma is giving away to a virtuous circle where progressive action in one area can be complementary and optimise activities in another and so on.
Key points and recommendations
The transition to a smart energy system provides an opportunity for the UK to be aleader in technology and service development, allowing us to take competitiveadvantage, developing skills and services that can be exported globally. Thereare growth opportunities across the whole value chain from initial generation,through to supply, and down to demand.
Low-cost, reliable and secure power supply is absolutely critical for ensuring UKcompetitiveness as we move towards an increasingly digitalised economy.In defining the policies and regulations that will drive transformation Government must ensure wider implications for the UK tech sector as customers are taken into account.
The current regime does not treat technologies equally. This Call for Evidence is animportant first step in ‘levelling the playing field’, removing commercial and regulatory barriers in the existing market arrangements, and creating policy framework that optimises opportunities for flexibility. Competitive markets will then deliver the best outcomes. However, to provide certainty, and stimulate market players and investors to move in the right direction, Government must continue to define the intended shape of our future energy system setting out a roadmap, including measures of success, in realising this new architecture. A lack of certainty around the transition and how progress and effectiveness are measured could act as barriers to the success of thesmart energy agenda.
Project timescales will require a commitment beyond the current Government and whilst demonstrators will highlight the potential opportunity of an innovation it isonly time which will tell if the market is willing to accommodate. To drive forward progress innovation funding should look to target trials at scale, aimed at accelerating the commercialisation of new business models and technologies.
In delivering a new energy system architecture government must account for the wider political landscape within which the system operates, this includes but is not limited to actions within the environment, transport, local government and the economy. A view of the UK’s changing position in the EU and the impact this may have on the sector should also be taken into account.
Consumers must continue to be at the heart of the low carbon transition and government must ensure that mechanisms are in place to better facilitate engagement, going beyond current activities. In driving greater customer engagement Government should seek to incentivise those who can benefit but not disadvantage those who can’t.
New services should be developed with the consumer in mind. This means ensuring consumers understand the services, the benefits it can offer, and how to use it. Thiswill be incredibly important in realising the additional benefits of the smartmeter rollout. Consumer participation in the deployment and use of smart metersis critical but cannot be taken for granted. More needs to be done to empowerand incentivise consumers to manage their demand, adopt new technologies andminimise costs to their benefit and that of the electricity system as a whole.Smart meters will be the first piece of smart energy technology in the majorityof people’s homes, it is important the experience is positive and momentumtowards further smart grid technologies is captured.
Building the UK’s smart energy future will require security by design, ensuring thatadded connectivity does not lead to reduced resilience. Development of a smartenergy system will be incremental and it will be important that a whole systemsapproach looking, not just at security in infrastructure, but also the securityof the technology in businesses and homes.
Members can download SmarterUK’s full response to Government below.
For more information on SmarterUK's smart energy work contact Aimee Betts-Charalambous.