Ofgem and government pave the way to a smarter, more flexible energy system

10 Nov 2016 12:48 PM

Ofgem and Government are seeking views on the development of a smarter, more flexible and user-friendly energy system.

This could save consumers between £17-40 billion by 2050 according to research by Imperial College and the Carbon Trust.  

Ofgem and Government are asking for views on developing a smarter, more flexible and user-friendly energy system which could lower the energy bills of Great Britain’s homes and businesses. 

A wealth of innovative technologies and services could deliver substantial savings, improve the reliability of GB’s electricity supply and support the move to a low carbon energy system. 

This includes increasing the use of energy storage technologies, such as batteries, in our homes, businesses and networks. Batteries can hold excess energy for use at times when the demand is higher or energy is more expensive. 

There is significant demand to develop electricity storage projects in particular. In recent months over 19 GW of applications have been made to connect electricity storage .We are calling on network companies to streamline the process for storage to connect to the grid. This includes ensuring it can connect in areas where it can ease network congestion and benefit other connecting customers. 

The roles of network companies are changing. Local grid operators need to be smarter and work closely with National Grid to work out the best solutions for managing a system with increasing amounts of low carbon generation. We say what we expect companies to be doing now and explain how these roles could develop in future.

We are also looking at what can be done to make it easier for businesses to provide voluntary demand side response, where they turn down electricity use at peak times in exchange for payments. 

Dermot Nolan, Ofgem Chief Executive, said:

“Having a smarter system will revolutionise how we all interact with the energy market. A smarter system also makes it far easier for new businesses to enter the market and offer new services. To get there we must make sure the regulatory regime is fit for the energy system of tomorrow and remove any barriers.” 

Secretary of State for Business, Energy and Industrial Strategy Greg Clark said: 

“I am excited to see new ideas and technologies coming forward to help keep household bills down, boost our energy security and meet our climate change commitments.

“Giving people access to a smarter energy system that is affordable, secure and puts them in control of their energy costs is an important part of our work to build an economy that works for all.”  

Notes to editors

1. The 'Smart, Flexible Energy System - a call for evidence' runs until 12 January 2017
2. The Call for Evidence references net benefits from a smart, flexible energy system of £17-40 billion, cumulative, by 2050. These figures are taken from a report by Imperial College and the Carbon Trust, commissioned by The Department for Business Energy and Industrial Strategy, to be published soon, entitled ‘An analysis of electricity system flexibility for Great Britain’. These figures are broadly in line with year-on-year estimates by other recent studies, including the National Infrastructure Commission, which estimated gross benefits of £3-8 billion per year in 2030.

About Ofgem

Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.

For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.