Smart systems and flexibility plan: industry reaction

The industry reacts to Ofgem and government’s plan to give homes and businesses more control over their energy use and support innovative new technologies.

Ofgem and the department for business, energy and industrial strategy (BEIS) have published their smart systems and flexibility plan.

The plan includes a decision to prevent distribution network operators (DNOs) owning and operating storage, as well as commitments to set new standards for smart appliances, EV charging and cyber security.

Overall, the plan sets out 29 proposed actions to resolve “specific regulatory and policy barriers” faced in the creations of a smart and flexible energy system in the UK.

These are grouped around three key areas: 

• Removing barriers to smart technologies
• Enabling smart homes and businesses
• Making markets work flexibly

Here the industry reacts:

Basil Scarsella, chief executive, UKPN

“We are on the verge of a change as significant for electricity as the advent of broadband was for telecommunications. We are already transforming our networks to be smarter and more flexible, and are currently consulting on our vision for the smart grid of the future.

“Working together with government, the regulator, academia and other stakeholders we believe this transformation will unlock significant benefits for consumers.”

David Smith, chief executive, Energy Networks Association

“As we head into the smart energy era, it’s vital that customers benefit from new technologies that allow them to take control of their energy and keep their costs down. Energy networks, through the Open Networks Project, are working hard to turn this vision into reality.

“Collaboration is key and our energy networks are ready, willing and able to build on their strong track record of customer engagement to deliver this vision.”

A spokesperson from the ENA also challenged Ofgem’s thinking on DNO-ownership of energy storage. They told Utility Week: “The key question is one of accessibility. Our members support flexibility, including storage, being procured from the competitive market place as a commercial service.

“However, it should be recognised that there are likely to be circumstances where the commercial market place does not provide storage services in the right places that networks need it or at the lowest cost to customers. In that case it may be best for the network to own and operate storage.”

Tim Rotheray, director, ADE

“This report is vital, setting out government’s vision of a flexible power system that gives customers greater control over their energy and promotes cost-effective decarbonisation.

“The review of network charging is critically important. We need a rigorous review to ensure that local generators and flexibility providers are fairly compensated for the value they provide. Recent work on the embedded benefits has damaged confidence among the decentralised energy industry and this review needs to be holistic and focused on all energy customers.”

Phil Sheppard, director of operations, National Grid

“[The] report provides clear direction on how we move to a secure, low carbon, flexible energy system, using efficiency and innovation to help keep costs down for bill payers. We’re pleased that our role of system operator has been recognised in supporting this transition”.

Juliet Davenport, chief executive, Good Energy

“This is a fantastic move by government and an exciting moment for the UK’s renewables industry. To deliver the low carbon economy of the future we have to embrace a new, smart energy system and battery technology will be at the heart of that.

“The move to a 100 per cent renewable future is possible.”

Dorothy Thompson, chief executive, Drax Group

“The UK electricity market has passed a tipping point and we welcome this timely announcement. The way electricity is generated, supplied and used is changing rapidly and our power system needs to change at the same pace.

“The government has made it clear that energy is at the heart of its Industrial Strategy. Battery storage and smarter technologies will be a key part of the energy mix needed to deliver the new electric revolution to the UK’s homes and businesses.”

Georgina Penfold, chief executive, Electricity Storage Network

“We are pleased to see the plan recognises the potential of energy storage, demand side response and smarter business models to be key parts in the delivery of secure, affordable and clean energy. The Electricity Storage Network has been pressing government and Ofgem for many years to consider the legal and regulatory barriers to the efficient deployment of electricity storage technologies.

“We support the suite of actions to reduce these barriers and to increase the opportunities to use energy storage in the flexible power system of the future.”

Julian David, chief executive, techUK

“No system can be completely secure but government has taken the right precautions whilst ensuring that innovative services can still grow and emerge; the Smart systems and Flexibility Plan continues that theme.

“Securing operational technology will be of primary importance for the tech sector as we digitise not just the energy sector but transport, manufacturing and many others.”

James Court, head of policy and external affairs, Renewable Energy Association

“The UK is among the global leaders for battery technology, but for the handbrakes to be taken off we need to see the rules and regulations made in a different age updated for these new technologies and approaches, coupled with a renewed commitment to renewables.

“The market is changing quickly, yet reversals in policy have seen the UK slowing in areas such as solar and onshore wind which are now cheaper than fossil fuels. The government needs to remember that the success of batteries, renewables and smart technologies are all interlinked.”

Justin Bowden, national secretary for Energy, GMB

“Progress along the road towards anything that might start to resemble a national industrial and energy policy for the UK is welcome.

“What Greg Clarke must do however, is keep his feet nailed firmly to the floor.

“That means as we expand support for crucial research into battery storage and cost-effective renewables we make urgent investment decisions to support gas and new nuclear so we have reliable base load capacity for all those times when the sun doesn’t shine and the wind doesn’t blow.

“The breakthrough in storage is still yet to come and wishful thinking alone won’t make it happen.”

Becca Aspinwall, energy expert, Pinsent Masons

“Legislating to support the advance of energy storage may prompt a sigh of relief for developers of projects that have been stifled by outdated energy regulation. For projects that have been rendered economically unviable due to exposure to inflated grid costs there is now some hope that this costly barrier to entry will be removed when storage is recognised as a distinct form of generation by law.”