Networks strategy and regulation
Developing a UK Smart Grid
Looking beyond 2020, the challenges for electricity networks are likely to increase. We are committed to reducing greenhouse gas emissions in the UK by at least 80% by 2050, relative to 1990 levels. DECC’s 2050 pathways analysis presents a framework through which to consider some of the choices and trade-offs which we will have to make over the next forty years. This analysis suggests that there could be significant changes to both electricity generation and demand in the future which will impact electricity networks and system balancing. It suggests, for example, that a substantial level of electrification of heating, transport and industry will be needed; that electricity supply will need to be decarbonised and may double; and that increased variable generation will add to the challenge of balancing the electricity grid.. To meet these challenges, the future system needs to be more integrated and flexible. We will need a bigger, smarter network, reaching to new places, and able to match supply and demand in real time. DECC aims to:
- Develop strategy for future policy and regulation to ensure electricity networks and system balancing options can meet longer-term challenges
- Develop and implement policy for smart grid capability in the UK
Electricity systems policy
The Electricity Market Reform White Paper set out the Government's aim to develop its electricity systems policy next year, focusing on challenges around balancing and system flexibility. We will look at the future management of the electricity system and set out different options for responding to the changing demands that will be made of the electricity network as a whole. The policy will also address the role flexible solutions such as DSR, storage and interconnection will need to play, as part of the development of a smarter grid, to maximise the efficiency of generation and network assets while ensuring security of supply.
Smart grid policy in the UK
Building a smarter grid is an incremental process of applying information and communications technologies to the electricity system, enabling more dynamic ‘real time’ flows of information on the network and more interaction between suppliers and consumers. Smart grids will make a key contribution to UK energy and climate goals. The UK is taking action now and investing in smart grid development and planning for the future:
UK Smart Grid Cyber Security Report
The Energy Networks Association (ENA) published an independent report into Smart Grid Cyber Security on 29 June 2011. The report commissioned by ENA for DECC considered how government and networks should develop a strategy to secure the future UK electricity infrastructure together.
The report comes just weeks before a newly formed taskforce will bring together the energy networks’ and government’s security advisers to discuss how the future influx of IT and communications on the grid will be protected.
Energy Minister Charles Hendry said:
“The UK is taking action now, investing in smart grid development and planning for the future. I am grateful to the ENA for this report which I am sure will prove to be an important contribution to making sure our electricity grid infrastructure remains secure. The Government will shortly publish a high level strategy for the development of the smart grid as part of the forthcoming White Paper on electricity market reform."
A copy of the report can be found on the Energy Networks Association: Reports web page.
Smart Grids Forum
DECC and Ofgem are setting up a Smart Grids Forum to:
- Identify future challenges for electricity networks and system balancing, including current and potential barriers to efficient deployment of smart grids
- Guide the actions that DECC/Ofgem are taking to address future challenges, remove barriers and aid efficient deployment
- Identify actions that DECC/Ofgem, the industry or other parties could be taking to facilitate the deployment of smart grids
- Facilitate the exchange of information and knowledge between key parties, including those outside the energy sector
- Help all stakeholders better understand future developments in the industry that they need to be preparing for
- Track smart grid developments and their drivers; and
- Track smart grid initiatives in Europe and elsewhere.
We have published an open letter inviting applications from people who want to be members of the Forum:
Potential role of DSR in balancing the electricity system in the future
DECC commissioned Poyry to carry out a study on the:
- scale and nature of the electricity balancing challenge between now and 2050
- potential role and use of demand-side response in solving it
- impact on network development between now and 2050
This is a helpful independent report we hope will contribute to thinking on demand side response, storage and interconnection in balancing the electricity system in future.
The study compared the benefits of using DSR to reduce demand peaks, in order to maximise network efficiency, versus using it to match demand with generation, to maximise generation efficiency. A smaller follow-up study was also commissioned to understand the role pumped storage and interconnection could play in balancing supply and demand, both with and without DSR.
To compare the future system with the one we have today, Poyry established a baseline cost for comparison, which tries to reflect those aspects of system cost that could be impacted through the use of DSR. This is for use as a comparator and is not intended to accurately cost the future system. It therefore does not reflect a number of factors. Input assumptions were taken from Pathway Alpha of the 2050 analysis (an illustrative pathway), while cost outputs were developed through Poyry’s own modelling.
It should be noted the study was carried out prior to the Electricity Market Reform White Paper and so does not account for the impact of mechanisms set out therein.