Resilient and smart electricity networks are critical to ensuring energy security, as well as achieving our energy and climate change objectives.
This policy paper is an updated version of the policy paper first published by the 2010-2015 Government.
Britain’s energy network is 17 per cent cheaper in real terms than at the time of privatisation, reliability has improved by over 30 per cent since 2002 and over £16 billion of investment has been made since 2010.
Resilient and smart electricity networks are critical to ensuring energy security, as well as achieving our energy and climate change objectives. With rapid increases in low carbon generation capacity, including the first new nuclear stations expected to come online in a generation, timely investment and innovative solutions are vital to strengthening, upgrading and extending our electricity network, ensuring it is fit for purpose and delivers value for consumers through efficient practices.
The creation, maintenance and operation of electricity networks is a matter for network companies, overseen by the independent regulator, the Office of the Gas and Electricity Markets (Ofgem).
The Department of Energy & Climate Change (DECC) is responsible for setting the policy and legislative framework for the networks in Great Britain.
- ensure the timely, cost-effective and reliable connection of electricity generation to demand
- support a low-carbon, secure and affordable national system
Specific objectives for future electricity networks:
- maintain electricity network reliability
- ensure new generation (renewables, nuclear and fossil fuels) and new demand (including electric vehicles and heat pumps) receive timely and affordable connection to the network
- use regulation to make sure networks are cost effective, competitive and using smarter technology
We will achieve these objectives by:
- ensuring timely grid access for new generation through the Connect and Manage regime
- making sure the regulatory framework allows for network charges, securities and transaction costs that are cost-reflective and proportionate
- ensuring the network is managed in a cost effective way including through temporary transmission constraint licence conditions on electricity generators
- facilitating the development of the integrated EU energy market through the introduction of EU network codes
- identifying and helping to prepare for longer term challenges for the UK’s electricity network, particularly through the work of the Electricity Networks Strategy Group and Smart Grid Forum
- making sure the policy framework enables the assessment and delivery of transmission investment requirements in a cost-effective and timely manner
- coordinating our offshore network development programme, including interconnection
- producing an enduring offshore transmission regime that addresses operators’ concerns around how offshore transmission assets are commissioned under the generator build option within the regime
- encouraging network innovation
Building a smarter grid
The transition to a low-carbon economy will involve major changes to the way we supply and use energy. Transforming our electricity system is an important part of these changes.
Integral to this transformation will be an electricity grid that is fitted with more information and communications technology over time. The result will be a ‘smarter’ grid that:
- gives a better understanding of variations in power generation and demand
- let’s us use that information in a dynamic and interactive way to get more out of the system
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:
- Building on DECC’s 2009 vision document, Smarter Grids: the opportunity, and the Electricity Networks Strategy Group (ENSG) vision and a Smart Grid Routemap, in 2014 the Smart Grid Forum published a Smart Grid Vision and Routemap that sets out how smart grids will transform our energy system and help to minimise consumer bills, create jobs and enhance growth
- DECC is rolling out smart electricity and gas meters to all UK homes by 2020. Smart meters can pave the way for a transformation in the way energy is supplied and used and are a key enabler of the smart grid
- Ofgem provided up to £500 million between 2010-2015 through the Low Carbon Networks Fund to support smart grid trials sponsored by the Distribution Network Operator companies. Ofgem have now introduced the Network Innovation Competition which provides Innovation Funding to electricity and gas transmission and distribution companies
- DECC provided £2.8 million to 8 smaller smart grid demonstration projects through the Low Carbon Investment Fund
- we worked with ENA to develop a framework for smart grid standards, focused on cyber security issues
Smart Grid Forum
DECC and Ofgem set up a Smart Grid 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
- track smart grid initiatives in Europe and elsewhere
A particular achievement has been the construction in 2012 of a Smart Grid Evaluation Framework, which can help assess the value of smart grid technologies. This uses analysis of likely penetration of low carbon technologies consistent with meeting the 4th Carbon Budget, and will inform network investment decisions. This framework showed that under a number of different scenarios savings could be shown as a result of delayed reinforcement.