Government and Ofgem need to do more on delivery of a smart grid in U.K.


Paddy Tipping, MP 
London, U.K. — (METERING.COM) — February 25, 2010 – In a new report the U.K. Energy and Climate Change Committee has called on government to provide strategic leadership to ensure the timely delivery of a smart grid.

Further, the report says that although we know with some confidence how the electricity mix will evolve in the run up to 2020, there is much less certainty over what a completely decarbonized energy system might look like in the long run. Thus the government’s vision for the future of the electricity networks must take account of the range of possible scenarios for the evolution of the energy mix, ensuring it does not lock Britain into a particular outcome at an early stage.

Nevertheless, whatever the scenarios for the future development of the electricity mix, it is likely that they will include a much higher proportion of generating capacity that is not able to respond easily to demand. The only cost effective response is for demand itself to be more flexible and play a more active role in the management of the energy system.

The report “The future of Britain’s electricity networks,” is aimed at examining the issues that will be integral to the development of a smart grid that is able to meet Britain’s future needs

The report adds that the regulatory framework will need to adapt to meet the new challenges of facilitating the transition to a low carbon economy, whilst ensuring security of supply. Further, while the hybrid structure of the country’s networks sector may be adequate for now, the transition to a low carbon energy system may require a different organization of the industry. The government and the regulator should not be afraid to allow this to happen, whether through regulation or otherwise, so long as it provides transparent and fair access to natural monopoly network assets for both generators and consumers.

Launching the report, Paddy Tipping MP said the existing regulatory and policy frameworks, along with the grid infrastructure currently relied on were developed to serve the fossil fuel economy of the twentieth century. But the future looks very different.

“By 2020 the U.K. electricity network will need to accommodate a far more diverse energy mix that includes a much higher proportion of renewables that cannot respond so easily to fluctuating demand. The only cost effective response to these developments is the creation of a smart grid that intelligently manages demand and supply across the energy system.”

The report reviews a number of issues that will be crucial for building a smarter grid. Among these it expresses concern that Ofgem has granted funding for new grid investment projects before the completion of a fundamental review of how better use can be made of the existing network. Disappointment is also expressed at the industry’s failure to agree a new transmission access regime that will tackle the queue of 60 GW of generation, a large proportion of which is renewables, waiting to connect to the grid.

The report also comments on the absence of a “culture of innovation” within the networks sector and calls on the industry to show significant improvement to grasp the huge opportunities that the global smart grid market offers. Finally, the report expresses concern at the growing shortage of trained people in the networks sector and calls on Ofgem to do more to ensure the regulatory framework provides the incentives to invest in skills, and for the industry to play its role.

“The market alone will not be able to deliver the changes (required in transitioning to a low carbon economy) – it requires strategic leadership from government delivering a vision for the future that engages actively both consumers and the energy sector,” says the report.