UK Energy network companies have published plans to develop their first joint network innovation strategies to allow consumers to make use of new energy technologies, they said August 31.
Under firm pressure from energy regulator Ofgem, they will hope to create smarter grids, reduce carbon emissions and deliver financial benefits to customers. Ofgem will reward them with higher profits if they show a greater commitment to innovation, such as responding faster to customers' new energy requirements.
Ofgem said August 4: "The energy sector is undergoing fundamental change. The regulatory and market arrangements will need to evolve to ensure this happens in a way that protects and advances consumers’ interests and enables them to benefit from innovation and new services."
In particular, larger amounts of locally generated energy mean that customers are relying less on the national gas and power transmission systems for their needs, complicating the utilities' job of matching supply with demand and at the same time reducing their revenues from transportation. Heat pumps, batteries and solar panels have contributed to lowering carbon emissions and some technologies are nearing grid parity – so no more expensive than the average price of a kilowatt-hour from conventional energy.
Gas is included as the aim is to use the grid for carrying biomethane, hydrogen and other low-carbon gases; and testing smarter heating systems in the home. The gas network innovation strategy may be read here. The gas networks and the independent consultant will engage with relevant stakeholders, Ofgem and the government to "produce a high quality, forward thinking and collaborative innovation strategy for the gas networks," the document says.
Under the banner of the Energy Networks Association (ENA), the gas and electricity groups will work together to ensure the strategies are aligned and whole-energy system benefits are realised, ENA said.
The companies will hold public consultations on their strategies, including events in London, Glasgow and Telford, to ensure that technology developers, policymakers, academics and other stakeholders all have the opportunity to shape the strategies, which will then be submitted to networks regulator Ofgem March 31, 2018.
Innovate or go under
ENA CEO David Smith said that companies are already using innovation projects to drive forward network performance, deliver better value for money and find new ways to harness the potential of energy technologies. Another equally important question, he said, was how to harness the potential of energy technologies to enable new markets and provide new opportunities for consumers to have greater control of their energy bills and reduce their costs.
Warning the network operators of their need to adapt to the new world, Ofgem said early August: "As the energy system changes, and traditional boundaries and distinctions break down, there is a pressing need to ensure the system as a whole is effectively coordinated to deliver value for consumers.... The main current focus is on improving co-ordination across electricity transmission and distribution boundaries. We will also be considering where more co-ordination between electricity and gas may be beneficial."
This is not a purely UK phenomenon. In Germany, E.ON said the same day that it has introduced smart metering for photovoltaic (PV) cells. These can reduce and increase the power output of PV modules from a remote location on customer premises and also provide information about the technical condition of the solar panels as well as other measurables. The data transmission system also meets the most exacting security standards defined by national law on information security, it said.
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