Wednesday 17 July 2019

Smarter and more flexible energy system ‘could save UK up to £40bn’

Smarter and more flexible energy system ‘could save UK up to £40bn’

The UK's energy system becoming smarter and more flexible could potentially save the country somewhere between £17 billion and £40 billion by 2050.

That's according to Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS), which have written a joint letter to the Energy Networks Association (ENA) regarding its Open Networks Project, setting out their views on progress so far.

The letter notes that as electricity decarbonises and decentralises, energy networks will need to evolve too - the organisations originally set out actions to deliver a smarter, more flexible electricity system in the 2017 Smart Systems and Flexibility Plan and 2018 Progress Update.

It says they are pleased the Open Networks Project has taken a proactive approach to delivering results in these areas and adds Ofgem and BEIS are "keen that progress continues and tangible changes are implemented".

However, it also outlines a number of further steps for network and system operators to put into place - these include standardising flexibility procurement across network and system operators, demonstrating transparency in evaluating flexibility tenders, providing clear information on current and future system needs and setting out a clear roadmap for data transparency.

It argues these steps are vital in supporting the development of flexibility platforms and markets, addressing potential conflicts of interest that may arise and ensuring there are clear and tangible benefits to consumers in the long term.

The letter also suggests it is important for the availability of network information to be improved and made accessible in an interoperable format.

The letter reads: "The Future Worlds work has identified critical capabilities and coordination mechanisms that network companies and system operators need to develop, and the impact assessment has offered insights on the trade-offs for how responsibilities for these capabilities could be allocated. The Open Networks Project should progress with delivering tangible least regrets actions now – changes that will be needed in any future scenario - and identify the pathway for future development.

"We believe implementation and delivery of the changes referred to in this letter will be a determining factor in achieving a smarter, more efficient electricity system."

Written by

Bruna Pinhoni

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