Leader – Post-Brexit vote, let’s make the best of it

Utilities are gritting their teeth in the face of Brexit, but as they seek to carry on business as usual, some key challenges require attention.

“If you’re going through hell, keep going.”

These words are attributed to Winston Churchill, but they are apt advice for utilities leaders in a post-Brexit vote world, said Centrica boss Iain Conn at Utility Week’s Energy Summit this week.

Speaking for many, Conn expressed disappointment about the vote to exit the EU, and worry about its impact, but called on his peers to “make the best” of the situation.

Our event raised key questions about what this will mean in practice – although fewer answers. Among the leading challenges that will need to be proactively addressed and shaped by industry, regulators and government in the near future are:

1.  The ability of our national power grid to finance itself in a decentralised energy scenario: this question has rumbled in the background for some years, but the idea that decentralised generation coupled with energy storage would ever reach a scale where they challenged traditional grid economics was pooh-poohed by many. Now that is looking ever more likely and top minds at National Grid, Ofgem and Decc are increasingly occupied with how to respond.
As distribution networks become the new focus area for smart grid progress – incorporating local balancing and active network ­management – it is a challenge they will need to answer too.

2.  The future of interconnection: former shadow energy minister Alan Whitehead says prospects for interconnection are the “real problem” as far as Brexit is concerned. He warns that unless we remain integrated into a single energy market, the chances of getting the “necessary level” of interconnection for a flexible future power grid are “remote”. His concerns add to comments made by other experts to Utility Week.

3.  Making a decarbonised gas grid a priority: it’s difficult to ­imagine how the notion of widespread electrification of heat – which accounts for a major proportion of our energy use – was ever ­seriously supported as a policy position. The more information that emerges to show how insupportable this would be for our power ­system, the more the mind boggles. Leaders at our Energy Summit were clear: pushing forward decarbonisation of the existing gas grid is a least regrets pathway that will enable big strides towards ­meeting carbon targets in a way that is acceptable to customers.

A fuller review of the opinions and insights expressed by ­speakers at the Utility Week Energy Summit will be shared in our next issue.