In July 2017, BEIS and Ofgem published a joint vision of how the UK is to adapt to our changing energy system – Upgrading Our Energy System: Smart Systems and Flexibility Plan[1]. This plan is part of a wider BEIS Clean Growth Strategy[2], culminating in a ‘smart systems & flexibility action tracker’. This tracker summarises a set of 29 key policy and regulatory actions, under three priority areas:
- Removing barriers to smart technology (including energy storage)
- Smart homes and businesses
- Marking markets work for flexibility
BEIS and Ofgem have published a progress update to their plan. This update captures the progress that has been made to date against each of these actions, as well as posing two overarching questions to stakeholders about missing priorities and areas of research and innovation that BEIS and Ofgem should focus their funding on.
Meeting the challenge of a changing system
The report discusses the global transition to renewable energy and the resultant significant roles of storage and Demand Side Response (DSR), as essential technology areas to enable flexibility in our transforming energy system. BEIS references BNEF’s Energy Outlook 2018[3] report, that suggests that energy and DSR could collectively account for c.10% of total installed capacity globally by 2050, and estimates the value of a smart and flexible electricity system to be in the realms of £17-40billion by 2050.
BEIS and Ofgem have outlined that in the c.15 months since the launch of the plan, 15 of the 29 original actions have been implemented, with others progressing and they are committed to delivering the remaining 14 actions by 2022. Regen have lifted some of the key activities out below:
The update also describes nine additional actions/areas of focus from BEIS and Ofgem:
- Launch of the ‘Energy Revolution Research Consortium’, with 10-15 concept and design studies, up to three large demonstrators and an independent evaluation. By summer 2019, a competition for detailed designs for ‘smart local energy systems’ will be launched.
- Government policies and follow ups from the smart appliances consultation response
- Plans to launch a call for evidence for the next steps for the Clean Growth Buildings Mission
- Plans to launch a consultation by early 2019 on the introduction of secondary legislation to set standards for smart EV charge points (when parliamentary time permits)
- Understanding the electricity network impact of the Road to Zero strategy commitment, to increase the electrical capacity at motorway service stations (potentially related to National Grid’s plans to deploy transmission network connected EV super-chargers)
- Assess the linkages between smart metres and Energy Performance Certificates (EPCs) in the Standard Assessment Procedure (SAP), as well as linkages with ECO and Private Rented Sector Regulations
- Ramifications of the responses to the Capacity Market 5-year review
- Responses received to the small-scale renewable energy consultation and proposals for a ‘time of export’ tariff
- Ofgem to publish its reforms and proposed new arrangements regarding access and forward-looking network charging by the end of 2018
- BEIS are launching the Energy Data Taskforce, that will be run by the Energy Systems Catapult and chaired by Laura Sandys of Challenging Ideas
Progress is good – but more needs to be done
Regen welcomes this progress update and the actions on policy and regulatory barriers including; changes to planning guidance, network charging/levies, licencing and discussion around navigating new markets are all important steps to remove barriers to a smart and flexible energy system.
Many of these actions are critical to unlocking investment in smart, flexible and low carbon technologies and it is, therefore, vital that BEIS and Ofgem speed up progress on key areas, such as:
- The classification and licencing of energy storage
- The coordination of national and local flexibility services and the relationship between National Grid ESO and the regional DSOs
- Working with the ADE to follow through with the code of conduct for aggregators
- Recognising the value of energy storage and other short-duration technologies in the Capacity Market and other emerging markets
- Changes to how we pay for the electricity network
- A renewed effort to implement next generation smart meters, half hourly settlement and time of use tariffs for domestic consumers
- Ensure that decarbonisation is the heart of the priority areas identified and that there is ongoing coordination between the Smart Systems and Flexibility Plan, Road to Zero and wider UK industrial strategy
We will be discussing many of these topics and more at our annual Renewable Futures conference in Bath on the 27 November. For more information about how you can be part of this year’s event, please visit our event website on https://www.regen.co.uk/event/renewable-futures-and-green-energy-awards/ or contact Kerry Hayes on khayes@regen.co.uk or 01392 494399.
Merlin attends the Smart Systems Forum that sits alongside this process and is championing our and our members’ views that the areas of progress above need to see quicker and more direct action.
Author: Ray Arrell
Contact: rarrell@regen.co.uk | 01392 494399
[1] Plan available on BEIS website: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/633442/upgrading-our-energy-system-july-2017.pdf
[2] See BEIS Clean Growth Strategy: https://www.gov.uk/government/publications/clean-growth-strategy
[3] See BNEF New Energy Outlook 2018: https://about.bnef.com/new-energy-outlook/
[4] See BEIS response to consultation on proposals regarding Smart Appliances (Oct 2018): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/748115/smart-appliances-consultation-government-response.pdf