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Government Outlines Future Commitments to Smart Power

Government response to National Infrastructure Committee recognises need for review

The Government responded yesterday to the ‘Smart Power’ report from the National Infrastructure Commission (NIC).

The NIC report advocated the use of power interconnection, energy storage, and demand flexibility, in order to create a greener and more flexible energy system, and includes a call for reduced regulation and a removal of barriers to innovation.

The response addresses the wide range of recommendations from the NIC on what Government should be doing to increase smart power capacity and innovation in the UK energy industry.

This includes the allocation of at least £50 million for innovation in energy storage, demand-side response and other smart technologies and promises a DECC and Ofgem call for evidence on a smart systems route map. The call for evidence will be published shortly, and proposals for reforms are to be set out by spring 2017.

Electricity storage is seen as an area of high potential for the UK, and this response recognises the need for a legislative review to give energy storage a more equal footing with energy production. The Government is also exploring the potential for installing battery storage alongside solar panels on various sites, as a part of providing demand flexibility from the government estate.

The response outlines current work with Norway and Iceland on Interconnectors, and includes a desire to support market delivery of at least 9GW of additional interconnection capacity.

Views on process changes to the capacity market will also be sought through the Ofgem call for evidence. DECC will also monitor how the capacity market might need to evolve over time, with a full review taking place in 2019.

Over the summer, Ofgem will also be consulting on a revised System Operator incentives scheme.

Together with Ofgem, DECC plans to present a further assessment on the transition to more Actively Managed Local Networks in the forthcoming call for evidence and, in the government response later in 2016, will set out how and under what timeframe this transition should best take place.

Policy Exchange has launched a new project on smart power based on the current discourse on smart energy and reports from Ofgem, NIC, and DECC, and posted their synopsis today.

For more information, please feel free to contact Charles Wood.

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