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Flexibility in the Energy System

The term flexibility refers to the ability to react to the fluctuating needs of the power system, maintaining security of supply. Under requirements detailed in the Climate Change Act, the UK must reduce carbon emissions by at least 80% of 1990 emissions by 2050, and the UK energy market is rapidly transitioning to support this target. From a system primarily built upon large, centrally dispatched, flexible fossil fuel generation, the UK is manoeuvring to deliver increasing volumes of less flexible low carbon power. National Grid, as the System Operator (SO), recognises that “needs are increasing, most notably at the extremes” while conventional sources of flexibility are becoming less available due to continuing decarbonisation efforts.

Distributed Energy Resources (DER) and Demand Side Response (DSR) capabilities are growing steadily, expanding upon existing capabilities from pumped hydro and peaking plants to create a broader range of flexible energy assets. Flexibility is enabled in part by increasing digitalisation, helping to maintain balance on the system efficiently. Changing customer behaviours and infrastructure upgrades, including the roll out of Smart Meters, mean that demand is increasingly able to make valuable contributions towards maintaining security of supply.

Work in this space is led by Energy UK’s Flexibility Working Group. Originally established to feed into the Smart Systems and Flexibility workstream of BEIS and Ofgem its remit has now expanded to include leading on Energy UK inputs into the ENA Open Networks Project and the National Grid reform of Ancillary Services under SNaPS workstreams.

The Working Group recently set out Energy UK definitions of flexibility and positions on the future role of a DSO, and will soon set out roles and responsibilities for the future energy system, focussing on balancing responsibility and information provision. Further, in 2018, the Flexibility Working Group will:

  • Drive forwards BEIS and Ofgem actions from the SSFP, as well as identifying any gaps which should be addressed;
  • Aid in the development of a series of papers about the future of energy;
  • Provide a forum for members to engage with the Open Networks Project;
  • Support National Grid’s Power Responsive project;
  • Engage with the Smart Systems Forum on behalf of the energy industry.

Energy System Transformation

In order to transform the UK into a low carbon economy and allow the country to reach carbon emission reduction targets at lowest cost, there is a need to use our energy more intelligently. This means we need to develop smart, flexible and accessible systems that deliver efficient energy usage and increase UK companies’ competitiveness.

In 2016, Energy UK set up the New Energy Services and Heat (NESH) Committee to lead our work in this space and enable those energy industry actors outside of traditional supply and generation roles to join forces and become a part of the voice of the leading trade association for the UK energy industry. The Committee leads Energy UK’s work in engaging with government and supporting a set of smarter digitalised systems across power, heat and transport to unlock the estimated £17-40bn in benefits from a smart energy system.

NESH’s work programme enables the energy industry to drive forward the transition to a smart, flexible, low carbon energy system which meets demand at the lowest cost to the consumer, focusing on three primary work areas: flexibility in the energy system, the decarbonisation of heat and supporting low carbon transport (each supported by a dedicated working group). The NESH Committee examines the changing nature of the energy industry and the ways in which developing business models and a wide range of new and existing technologies will enhance security of supply and enable wider decarbonisation of power, heat, transport and industry.

In addition to the work being taken forward in flexibility, heat and transport, other priorities the New Energy Services and Heat Committee are taking forward in 2018 include:

  • The EMR five-year review, including future rule changes to the Capacity Market;
  • Ofgem’s Significant Code Review;
  • RIIO 2 and the changing role of network and system operators;
  • The changing role and classifications of distributed energy resources.

New Energy Services and Heat

Energy system transformation

In order to transform the UK into a low carbon economy and allow the country to reach carbon emission reduction targets, there is a need to develop smart, flexible and accessible systems that deliver efficient energy usage and increase UK companies’ competitiveness.

A holistic set of smarter digitalised systems across power, heat and transport needs to be supported by co-ordinated Government policies and in 2016, Energy UK set up the New Energy Services and Heat Committee to lead our work in this space and enable those energy industry actors outside of traditional supply and generation roles to join forces and become a part of the voice of the leading trade association for the UK energy industry.

Energy UK’s New Energy Services and Heat (NESH) work programme enables the energy industry to drive forward the transition to a smart, flexible, low carbon energy system which meets demand at the lowest cost to the consumer, focusing on three primary work areas: flexibility in the energy system, the decarbonisation of heat and low carbon transport. The NESH committee examines the changing nature of the energy industry and the ways in which developing business models and a wide range of new and existing technologies will enhance security of supply and enable wider decarbonisation of power, heat, transport and industry.

Three Working Groups support the Committee’s work in line with its focus, on system flexibility, the decarbonisation of heat and the decarbonisation of transport, each with their own programmes of work and priorities.

Low Carbon Transport

Emissions from the transport sector are largely unchanged from 1990 levels, which, combined with the fact that emissions from energy supply have been cut by 65 per cent since 1990, has resulted in transport recently becoming the largest emitting sector in the UK. There could be up to 10 million electric vehicles on UK roads by 2030 and a decade later the Government plans to phase out the sale of internal combustion engines entirely, representing an important opportunity to leverage the increasingly decarbonised electricity supply to cut transport emissions.

EVs will therefore play a key role in the future of road transport. Energy UK established the Electric Vehicle Working Group to provide a forum for retailer, generator and other energy stakeholder to develop positions on the optimal market arrangements for electric vehicles. The Electric Vehicle Working Group has enabled Energy UK to establish positions with which to influence government, most recently in a letter to ministers setting out the need for ambition in the Road to Zero and requesting ambitious targets for decarbonisation.

Published in 2017, ‘The Electric Vehicle Revolution’ sets out industry positions on the growing interdependency of transport and power and the facilitation of the uptake of electric vehicles. The Electric Vehicle Working Group is currently working on a follow-up paper to outline the key challenges and opportunities of integrating low carbon transport solutions into the energy system, as part of which a paper and consultation on smart charging standards was recently undertaken.

Other key work areas for the Electric Vehicle Working Group in 2018 include ongoing engagement with the Automated and Electric Vehicle Bill and continued close engagement with OLEV.

Energy UK also sits on Government’s EV Energy Taskforce and the GLA’s EV Infrastructure Taskforce, as well as a range of other groups.

Customer Communications

Rules of engagement: putting customers at the heart of communications

In Summer 2017, Ofgem commissioned Energy UK to undertake some work on customer communications. This was to help inform a wider review of the supply licence rules relating to customer communications, in light of a potential move towards Principles Based Regulation (PBR).

Energy UK’s report  begins by identifying that customers need sufficient information to be able to:

  • Pay for energy
  • Know where to seek assistance in relation to their energy
  • Complain if something goes wrong
  • Know what to do in an emergency
  • Find a deal to suit their characteristics and preferences; and,
  • Be aware of and understand contractual obligations, rights, changes and events.

The report goes on to provide Energy UK’s view on relevant licence conditions and poses the following recommendations to Ofgem and Government:

  1. Ofgem should be bold in removing prescription;
  2. There is no need for further broad principles;
  3. There may be scope for some new narrow principles or light-touch prescription;
  4. The supply licence should not stipulate specific forms of communication such as a bill or Statement of Account; and
  5. Ofgem should work with the Government to seek to reduce the reliance on supplier-led customer communications as a means of promoting information beyond the six priority areas noted above.

Energy UK & Ofgem workshop on the Future of Customer Communications

Following the release of our report, Energy UK hosted a workshop on the future of customer communications. This provided an opportunity to continue dialogue, discuss the report and its findings and seek constructive views, challenges and suggestions on all recommendations posed.

The purpose of the workshop was specifically to discuss:

  • Consumer needs in relation to customer communications
  • How best to deliver positive consumer outcomes through specific customer communications
  • What risks there are to manage
  • What this could mean for Ofgem licence conditions reform
  • What industry can do to provide assurance to Ofgem that they are treating customers fairly

Speaker Blogs

Panel speakers at our workshop on the future of customer communications provided their thoughts on:

  • What good customer communications look like?
  • How will customer communications need to evolve in the future?

The contributing panel speakers have kindly summarised their views in the form of blogs which can be read below, alongside a blog from Energy UK which provides our own thoughts following our analysis.

Ofgem Working Paper

Ofgem has as of 14 December 2017 released a working paper entitled "Working paper: Domestic supplier-customer communications rulebook reforms."  

This sets out their initial response to all inputs gathered in relation to the review of the supply licence rules around customer communications.

 

Retail Health and Safety

Retail health and safety touches on all incidents that could take place in servicing the energy supply in consumers’ homes. This work is led by our Retail Health and Safety Forum analyses trends in order to identify opportunities to raise standards, both across the membership and across industry.

Our aim is by bringing together the expertise of our membership we enable good practice to be developed and promulgated. Energy UK and our members believe that H&S is not a commercial advantage and hope our work can be adopted by members and non-members alike.

As a part of our work we regularly publish guidance to assist suppliers with raising their health and safety standards, whether that is advising strategic issues or getting best practice to frontline staff.

Management presentations

Our management presentations look to assist with bringing health and safety to the heart of strategy in organisations of all sizes. They reflect issues raised by the retail H&S committee as well as stakeholders across the Energy landscape.

Toolbox talks

These presentations are designed to assist supervisors in introducing and reinforcing topics with their workforces

Supplier Health and Safety initiatives:

As well as working together through the Retail Health and Safety Forum, Energy UK members have developed initiatives individually that they are happy to share with industry to drive health and safety improvements. We invite suppliers to use these initiatives to support their own activity

  • Missing washers: EDF Energy have worked with Cadent to develop a short video that can be sent to meter installers in the field to remind them of the importance of following the correct procedures for the installation of washers on gas meters. Watch the video
     
  • Pipe cleaning and soldering: EDF Energy in conjunction with Cadent have produced a short video that can be sent to meter installers to remind them of the necessary steps to undertake when preparing pipework and fittings for soldering.
    Watch the video
     
  • Unbunged ports and exposed copper: EDF Energy have developed a short video which can be sent to meter installers to remind them of the necessary steps to undertake in relation to bunging exposed ports and ensuring there is no exposed copper wire. Watch the video
     
  • Loose connections: EDF Energy have developed a short video which can be sent to meter installers to remind them of the necessary steps to undertake to avoid leaving loose cable connections when installing meters.  Watch the video

Working alongside our members, we have documented many of the initiatives our members have implemented to further improve safety during electricity and gas meter installation activity. These initiatives can be found in the following documents. As new initiatives are implemented, we will update these documents accordingly

Retail Health and Safety Forum project summaries:

Members

 

Generation health and safety

The Generation Health and Safety Forum focuses primarily on the operational challenges associated with electricity generation on various power station sites.

It was established over 10 years ago. Having originally held a distinct focus on thermal plant, the Generation Health and Safety Forum has expanding their focus to not only ensure our legacy assets are decommissioned safely, but also that new plant and technology coming onto the system is safe and secure by design.

Now, we have over 40 members contributing to the promotion and development of Health and Safety standards across various electricity generation sites.

This group promotes best practice, offers guidance and monitors our generator’s Health and Safety performance to ensure standards are met and improvements are made year on year in keeping incident numbers low.

Industry Guidance

The generation health and safety forum as well as the Safety Rules Forum and the Fire Safety Group produces industry guidance to support members and the industry in creating their own policies and practices.

Members:

Water Resources

Energy UK members in the Joint Environmental Programme (JEP) have produced two reports on water use at thermal power plants. The first sets out the current status of UK power plant water use as well as future scenarios and their potential implications for the water requirements of the power sector and other societal water demands. You can read the full report here. The second outlines how the future development of water requirements by the power sector can only be assessed with a very substantial uncertainty; uncertainty which increases with time and which results from the variability of the water gross use and consumption rates associated with different cooling technologies. This report can be read here.

According to the Environment Agency, overall water use (mains water plus direct abstraction) by the combustion sector decreased by 20%, from almost 2 billion m3 in 2014 to 1.6 billion m3 in 2015. This is mainly due to the closure of large ‘once through cooling’ power stations under the Large Combustion Plant Directive.  

Since 2010, net water use by the sector has decreased from 0.19 billion m3 to 0.11 billion m3 in 2015, falling by 20 million m3 between 2014 and 2015.

1)  Chart: Environment Agency’s Business and environment report: Environmental outlook for the combustion sector (2016)

Water Resources East

Energy UK is currently a partner in the Water Resources East (WRE) project: a cross-sectoral project led by Anglian Water working with input from the energy, agricultural, water supply and environmental interest groups.

The WRE mission is to work in partnership to safeguard a sustainable supply of water for the East of England, resilient to future challenges and enabling the area’s communities, environment and economy to reach their full potential.

The East of England is already facing the threat of water shortages. Climate change, population growth and abstraction reductions mean that the risk of water shortages will be even greater in future, unless we take action now. WRE is pioneering a new, collaborative approach to water stewardship. The project is working to create a multi-sector long-term water resource strategy, which balances affordability and reliability with sustainability and environmental stewardship.

Energy UK is providing input on the potential impacts of water shortage on the power sector.

For more information, see the Water Resources East website.

 

 

 

Closed accounts with credit balances

Energy suppliers are committed to providing the best service they can to their business customers. Sometimes, however,  former suppliers can lose touch – usually because a business owner has moved without leaving a new address. When this happens, and when no final meter reading was provided, customers may be owed a small amount of money.

If you think this could have happened to your business please get in touch with your old supplier – they will check and, if you are owed any money – get this back to you as soon as possible.

Further information

Closed accounts with credit balances - voluntary minimum standards for Micro Business customers - March 2015 (PDF 600KB)

Smart Demand Response

The Smart Demand Response document presents the result of joint work between network operators and suppliers assessing how the role of Demand Response in the future of Great Britain's (GB) electricity supply might be realised.

It is deliberately positioned as a discussion paper to promote industry debate and doesn't seek to prescribe solutions for Smart Demand Response in the GB Market. It sets out the drivers, requirements and potential market options for Smart Demand Response and then undertakes a qualitative assessment of those options and sets out a potential way forward to facilitating Smart Demand Response.

If you would like to know more, contact This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Roll-over contracts

It is important for any business, particularly micro businesses, to be aware of the terms of any contracts they enter into and, in particular, the contract renewal date.

If the contract is not terminated or renegotiated before this date, then some contracts will automatically continue or roll over to prevent micro businesses from going onto higher rates.

Further information

Rollover Contracts: a factsheet for micro business customers (PDF 1MB).

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