Tuesday 24 April 2012

Funding delays to smart grid will bring “no benefit”

Holding back on funding the change to a smart grid won't bring a "great deal of benefit", won't save us much money and could cost the UK its leading role in the new technology sphere.

That seems to be the consensus from investors, suppliers and analysts at the Smart Grid GB conference in London today, where a new report by Ernst & Young was released on the future of smart grids.

The concern comes as more than twenty energy ministers from around the world gather in the UK's capital this week to discuss ways to develop low carbon technology at the third Clean Energy Ministerial.

The report predicts around 9,000 people could be working in Britain's smart grid sector by the 2020s and 30s, while businesses it supports such as the electric car industry could employ as many as 470,000 by the 40s.

Called "Smart Grid: A race worth winning", the report was based on interviews with firms in the young industry, suggesting a smart grid roll out now could save the country up to £19 billion, compared with having to carry out upgrades to a more 'conventional' grid.

However the companies who are charged with this roll-out - widely expected to cost £200bn in total - are giving strong signals the UK Government needs to let it crack on with the task at hand.

"The suggestion from the interviews we held was that it's better to get spending on it now rather than wait," said Bill Easton, Director of Utilities at Ernst & Young. "It doesn't look as though waiting gives a great deal of benefit."

On the other hand, if we do delay investment in our smart grid, one speaker suggested, we could forfeit our strong position.

"The Low Carbon Network Fund (LCNF) still isn't big enough, it needs to make the differences at an earlier stage, because other countries are moving on," said Paddy Turnbull of GE Energy.

He suggested the UK should "learn a lesson" from the US to really "accelerate" its smart grid programme. The Ernst & Young report also points to growing competition from China and South Korea.

Attempting to ease these concerns, Energy Minister Charles Hendry who was also speaking at the event said: "It's a big challenge to undertake, this rollout... But if we look back in a few years' time and say that we've missed an opportunity because of the decisions we could have taken now, then that would be a terrible mistake to make."