Kwarteng: Energy system must adapt to keep pace with innovation

The rapidly evolving nature of the energy system may trigger reform of its regulation, the energy minister has said.

Kwasi Kwarteng told a meeting, held at the House of Commons yesterday (9 March) to mark the publication of the Energy Data Taskforce’s latest report (key points below), that the biggest challenge facing the sector was the rapidly evolving nature of the energy system.

He said that while solutions to issues such as heating and power generation might be “politically difficult” they were inherently “quite simple” problems to deal with.

Kwarteng said the inter-relationship between the energy systems, networks and regulation was “intellectually very demanding” because “nobody” had previously tried to decarbonise in the way that the UK has committed to by 2050.

“We are really in uncharted waters: regulation and institutional architecture are quite challenging issues.”

He promised that a whole chapter of the government’s upcoming energy white paper would be devoted to energy systems and the challenges involved in their design.

“The system that is evolving will be very different to the one we have inherited because it’s a completely different model for energy. Our job is to make sure that the institutions as they evolve can keep pace with innovation.

“It may be that we can leave everything as it is, may well be that we have to look at the system operators.

“The nature of the energy system and flexibility is a very different world to when these institutions were set up. You might – in time-honoured British fashion – keep the institutions and make them adapt or you might think about making slight tweaks. But the point is that in 2020 we have to come up with answers quite quickly.”

At the same event, Ofgem chief executive Jonathan Brearley expressed frustration that greater progress had not been made on helping vulnerable customers.

He said: “To be honest, I don’t understand why this industry cannot identify the most vulnerable customers and make sure that their needs are understood and met. I’m sure there is a very advanced AI solution but there are some basic things we can do.”

Fintan Slye, the director of the National Grid Electricity System Operator, warned that the industry faced a shortage of digital skills.

But he said that the sector could use its decarbonisation mission to inspire a fresh generation of recruits.

He said: “There is a huge issue of trying to get the right people but the generations coming through are motivated by solving climate change.

“Within the energy system it is those companies that can demonstrate that sense of purpose and are actually delivering on the ground that will see that talent.”

Greater digitisation crucial to hit net zero

The Energy Data Taskforce report stresses that the decarbonisation agenda is being hindered by poor quality, inaccurate, or missing data, while valuable data is often restricted or hard to find.  The taskforce has set out five recommendations centred around the principles of filling in the data gaps through new and better quality data and embedding the presumption that data is open.

The recommendations in full are:

Digitalisation of the Energy System – Government and Ofgem should use existing legislative and regulatory measures to direct the sector to adopt the principle of digitalisation of the energy system in the consumers’ interest.

Maximising the Value of Data – Government and Ofgem should direct the sector to adopt the principle that energy system data should be presumed open, supported by requirements that data is “discoverable, searchable, understandable”, with common “structures, interfaces and standards” and is “secure and resilient”.

Visibility of Data – A data catalogue should be established to provide visibility through standardised metadata of energy system datasets across government, the regulator and industry.

Coordination of Asset Registration – An asset registration strategy should be established in order to increase registration compliance, improve the reliability of data and improve the efficiency of data collection.

Visibility of Infrastructure and Assets – A unified digital system map of the energy system should be established to increase visibility of the energy system infrastructure and assets, enable optimisation of investment and inform the creation of new markets.