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Smart energy could save £8bn a year

The UK could save up to £8bn a year by using electricity better, the government's infrastructure advisers say.

The National Infrastructure Commission recently published its first report Smart Power stating that the UK could save up to £8bn a year by 2030 with a smarter, more flexible electricity system.

The report finds that by supporting innovations in interconnection, storage and demand flexibility Government can help secure UK energy supply for generations.

Commission chair Lord Adonis says fairer regulation and a better managed power network will allow "exciting new technologies" to compete without the need for new subsidies and without "significant" public spending.

The report sets out three key recommendations:

Government should pursue additional interconnectors with other European countries where the benefits are most significantThe UK should become a world leader in electricity storage systems by removing outdated regulatory barriers, and Ofgem encouraging network owners to use storageThe UK should make full use of demand flexibility by improving regulation, informing the public of its benefits and piloting business models

By supporting technological innovation government can cut emissions and save consumers money.

Investing in energy storage will provide greater balancing potential supporting an increase in renewable generation, as well as supporting local systems in managing disruptive energy use models arising from increased electrification of heat and vehicles.

By connecting thousands of web-enabled home appliances like freezers and washing machines to the grid we can reduce supply pressures at peak times, minimising the need for additional plant capacity. Such demand flexibility is already being used by larger organisations such as supermarkets and hotels to support National Grid in times of high demand.

Current proposals for changes to the Capacity Market could however work against the Commission’s recommendations. In a recent consultation DECC are proposing to charge distributed generators for costs associated with the transmission network, even though they don’t use it. There are also proposals to end the Capacity Market’s year-ahead auction set aside. Currently the set aside provides a guarantee to flexibility providers that there is a minimum value accessible. By removing this Government eliminates the incentive for a demand response market to grow.

 

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