London, U.K. — (METERING.COM) — July 13, 2011 – The development of a more flexible electricity network – a smart grid – is one of the keys to transform the U.K.’s electricity system to ensure that future electricity supply is secure, low carbon and affordable, the government has identified in its newly released White Paper on electricity market reform.
The government says it recognizes that reducing demand is likely to be more cost effective than building additional capacity. This will also require better use of existing generation through the development of a more flexible electricity network. But while significant progress has been made over the last few years on improving networks, there are more significant challenges ahead.
The White Paper, “Planning our electric future,” is aimed to set out the government’s commitment to transform the U.K.’s electricity system, so that by 2030 the country will have: “A flexible, smart and responsive electricity system, powered by a diverse and secure range of low carbon sources of electricity, with a full part played by demand management, storage and interconnection, competition between low carbon technologies … a network that will be able to meet the increasing demand that will result from the electrification of our transport and heating systems…”
Key elements of the reform package include a carbon price floor, the introduction of new long term feed-in tariffs, an Emissions Performance Standard, and a Capacity Mechanism including demand response and generation to ensure future security of supply.
Regarding future networks and system flexibility, the government says it has begun work through the Smart Grids Forum, a cross-industry group that it leads with Ofgem, to consider how future network challenges can be addressed.
The shared scenarios and assumptions developed through the Smart Grid Forum and set out early next year will act as a guideline for networks companies and Ofgem in planning the next round of distribution network investment. The development of a framework for understanding and evaluating the value drivers for smart grid solutions, also through the Smart Grids Forum, will be led by Ofgem and published in spring 2012. This will facilitate discussion between Ofgem and the network companies as part of the business planning process.
Further, the government will set out its electricity systems policy in summer 2012, including discussion of the future system framework and how it will need to adapt to deal with future challenges.
According to the White Paper, up to £110 billion investment in electricity generation and transmission is likely to be required by 2020, which is more than double the current rate of investment.