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Publications / Blogs

Delivering a Smart and Secure Electricity System

After weeks of political change with the cost-of-living and global gas crises dominating headlines, you may be forgiven for discounting industry gears running in the background for a smarter, flexible and more secure future energy system. However, it is paramount that these efforts are kept apparent, firstly to policy-makers who have the power to action enabling market conditions, and secondly to consumers, so that they may be empowered and knowledgeable about opportunities to gain benefit from actively participating in our transition to Net Zero.

Last week, Energy UK published two projects contributing to these efforts, our response to Government’s consultation on a Smart and Secure Electricity System, and a joint report with BEAMA on The Future of Smart Charging (FoSC). Both detail the role of demand side response (DSR) services in domestic energy smart appliances (ESA) such as electric vehicle chargers, heat pumps and battery storage units.

DSR is the service that brings forward benefits of such appliances to both the energy system and consumers. It allows consumers to use electricity at a lower cost, whilst enabling energy to be more efficiently distributed on the system. This will help flatten peaks in demand when used collectively, reducing the need for carbon-intensive generation, managing costs for the electricity network and ultimately lowering bills for all consumers. 

The importance of DSR and its evolution therefore cannot be understated. Our FoSC report aims to help all stakeholders, including Government, understand the implications for industry and consumers of identified options for delivering this service in smart chargers; regarding the interoperability and cyber security of devices as well as required levels of data privacy and grid stability. It also outlines recommendations for further thinking to better enable smart EV charging, for instance on an evolutionary approach to solutions which will mitigate grid stability risks caused by mass uptake of such chargers. As Government consults on the technical design of proposed delivery options in 2023, we urge close collaboration and appropriate lead times for industry to truly deliver the best possible products and services for maximum consumer benefit.

Though it is not only consumer benefit at stake. ESA markets are nascent and varied, yet also highly innovative, complex and fast-changing. Likewise, the reality of the impacts of DSR services are not yet fully known and will change as we realise their full potential. The UK currently holds a comparative advantage in these markets and services due to the nature of our energy system and expertise in the technical, scientific and communications services that go into ESA capital projects.

Therefore, we urge Government not to mandate overly prescriptive standards, burdensome compliance requirements or stringent governance arrangements that may ultimately risk obstructing the evolution of the best deliverable functionality of services in each technology. An ‘options-based’ approach to regulation that is equal to the associated risks should instead be pursued. This will ensure that British manufacturers and service providers continue to maintain attractive markets within the UK, lead innovation globally, and heighten export opportunity.

These are industry’s gears, so how do we make them more perceptible to policy-makers and consumers in the current context?

As a start, the ESA sector must come together and highlight the whole energy system impact that is possible only if enabling policy levers are pursued by Government. To deliver the level of innovation, flexibility, export potential and consumer benefit required for our system, strong policy must be implemented to support ESA uptake. An ambitious Zero Emissions Vehicle mandate from 2024 alongside a well-designed Market Based Mechanism for low carbon heat will assist consumer uptake and therefore provide clear signals to industry to invest in and develop DSR services for these consumers.

Finally, a more creative narrative coupled with targeted consumer education on the benefits of utilising new low-carbon technologies is still required to ensure that we bring everyone along on our transition, and not only the most willing.

Energy UK will continue to work alongside a range of stakeholders from across the ESA and DSR landscapes to ensure industry-led flexible standards drive effective delivery for consumers and the energy system.