The Covid-19 pandemic has reinforced the need for change. The immediate impact on generation and demand patterns may be short-term, but as people adjust their lifestyles and work patterns it may also have an enduring effect. Domestic demand has risen as working from home becomes more common. As a result, individual needs and expectations have shifted.
Further, there is increasing discussion about how to respond to the economic challenges of the pandemic, with a greater focus on renewable energy as part of powering a green recovery. This could mean an acceleration in decarbonisation, distributed generation, and electrification.
In Britain, RIIO-ED2 comes at the right time to address these challenges. With its methodology consultation expected to be published this summer, Ofgem has the opportunity to send a signal about the importance of reliability, including short interruptions.
Will a greater focus on short interruptions translate to improved reliability? Evidence from a range of international jurisdictions suggests it will. Examples include Italy, where short interruptions have fallen by 40 per cent since 2008; Sweden, with a 27 per cent reduction since 2010; and Victoria, Australia, with a 19 per cent reduction since 2013.
Incentives change behaviour. Therefore, the signals Ofgem sends on interruptions in its methodology consultation will undoubtedly influence investment decisions in grid reliability.
