KMPG says UK needs a decentralised energy system

decentralised energy
The DECC forecasts that the UK national grid will need an additional 100GW in order to deliver large-scale energy deployment by 2035. 47GW is expected to be sourced from renewables

A new report by global consultancy firm KPMG outlines how the UK can deliver cheaper electricity bills to households and businesses through a decentralised energy strategy with solar and storage at its core.

The report, targeted at the government, puts forward a future strategy that claims to assist the UK to address several energy challenges – by redistributing funding for solar currently available under the country’s Levy Control Framework government.

According to the UK’s National Audit Office, the Levy Control Framework is considered a “valuable tool for supporting control of costs to consumers arising from government energy policies”, and not exceed its budget.

In July 2015, the UK Department of Energy and Climate Change (DECC) decided to review its support of renewable and clean-energy schemes, and subsequently decided to cut subsidies on implemented to wind, solar and biomass.

Energy Minister Amber Rudd has also removed tax exemption from low-carbon power generators, and has cut the government’s primary domestic energy efficiency programme.

Next Energy news reports that the cuts could take as much as “87% off the value of small-scale solar feed-in tariffs.”

In addition, the large-scale solar sector is said to be slowing down, as a result of other programmes, such as Renewable Obligation Certificates (ROCs) coming to an end.

Solar + storage

Another report by energy regulator Ofgem recommends increasing the flexibility of the electricity network, with the implementation of energy storage.

The regulator also suggested investigating non-traditional energy business models to provide services to the grid – eg. distributed generation to host platforms that allow for energy trading and other flexibility mechanisms such as demand response.

Tariff structure

KPMG’s ‘Decentralised Energy Transition’ report makes further recommendations on tariff structures for solar and storage systems. It suggests the re-working of future feed-in tariffs for solar and a time-limited incentive for households to purchase domestic storage solutions.

It adds that tariffs can be combined with time-limited deployment ‘grant’ for storage, similar to the scheme, which would include a one-off payment for discharge capacity made available to residential customers.

Solar development company Lightsource Renewable Energy, co-author of the report, found that while traditional PV solutions meet 20-35% of a regular household’s energy demand, a “whole house”  solution would meet 60-90% of a home’s energy needs.