A Smart Power Revolution could save consumers £8bn a year

Posted On: 7th March 2016

The National Infrastructure Commission has published its first report: Smart power.Government Opportunities

In October 2015, the National Infrastructure Commission was asked to consider how the UK can better balance supply and demand, aiming towards an electricity market where prices are reflective of costs to the overall system.

The Commission has published that analysis.

The Commission’s central finding is that smart power – principally built around three innovations, interconnection, storage, and demand flexibility – could save consumers up to £8 billion a year by 2030, help the UK meet its 2050 carbon targets, and secure the UK’s energy supply for generations.

‘Smart power’ makes practical recommendations to this end – not new subsidies or substantial public spending – but towards the creation of a level playing field and a better managed network:

  • government should pursue additional interconnectors with other European countries where the benefits are most significant
  • the UK should become a world leader in electricity storage systems. Two steps are required: a review of the regulatory and legal status of storage, removing outdated barriers to be completed by Spring 2017 and implemented as soon as possible, and Ofgem should encourage network owners to use storage
  • the UK should make full use of demand flexibility by improving regulation, informing the public of its benefits and piloting business models

Lord Adonis said:

“Quality infrastructure is fundamental to our quality of life. Better decision making, clearer planning, and more efficient and timely delivery can help create the world class infrastructure this country needs to succeed.

To radically improve, we have to do more than simply adapt to a changing world – we must shape that change to our advantage. The developments in our electricity sector are a case in point.

Our existing power stations are closing down and their replacements will be radically different as we decarbonise supply to reduce emissions. This represents an enormous challenge, but it also leaves the UK uniquely placed to benefit from three exciting innovations set to transform the global electricity market – interconnection, storage and demand flexibility.

The UK can lead the world in harnessing these innovations, bringing jobs and investment into the country and cutting bills for consumers. The National Infrastructure Commission report, Smart Power, makes a series of strategic recommendations to help do exactly that.

We do not call for new subsidies or significant public spending, but rather a level playing field through fairer regulation and a better managed network to allow these exciting new technologies to compete.

If we get this right a smart power revolution could save consumers £8 billion a year.”

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