Utility Week

UTILITY WEEK | 10TH - 16TH JANUARY 2020 | 7 Utility of the Future: Regulation A clean break: how does the UK reach net zero? Continuing the Regulation pillar of our Utility of the Future series, Stephen Cousins asks what lessons we can learn from around the world to help decarbonise our economy? T he UK has made great strides in the transition towards a low-carbon energy economy, but a new national target to be carbon neutral by 2050 and sweeping changes to the way power is generated, deliv- ered, and consumed, will place unprecedented demands on network regulation, planning and operation. A proliferation of new energy and storage technolo- gies, from electric heat pumps to homes batteries and electric vehicles (EVs), and a move away from traditional centralised power plants to a more distributed system, is forcing a rethink of how utilities manage energy flows and co-ordinate demand response. Heating accounts for around a third of UK greenhouse gas emissions and, alongside energy efficiency improve- ments to homes and businesses, there is an urgent need for sustainable energy alternatives like low-carbon district heating networks or the use of hydrogen as a replacement for natural gas. Policy and regulation will be key to directing environ- mental strategy, but critics claim that prescriptive energy regulation smothers the innovation needed to create sus- tainable solutions. A recent report by the National Infra- structure Commission warns that the UK will fail to meet its 2050 net zero target unless regulators are equipped with new powers to boost investment in sustainable Infrastructure and move away from the current culture of "short-termism". Meanwhile, no-one has yet convincingly answered the question of who should pay for decarbonisation, and whether the bill should be met through taxation on businesses and/or individuals, or customer energy bills. Michael Pollitt, assistant director of the Energy Policy Research Group tells Utility Week: "Energy demand is actually falling in OECD [Organisation for Economic Co- operation and Development] countries but low-carbon solutions involve very high fixed costs. It is difficult to see how you can decarbonise without raising the unit price of energy, and the capacity to finance this through taxa- tion is limited." Britain is not alone in grappling with these chal- lenges, and as the examples on the following pages dem- onstrate, important lessons can be learnt from ideas and initiatives implemented in countries abroad. The five pillars of the Utility of the Future campaign: Climate change Regulation Business models and skills Consumers Technology continued overleaf ☛ The Utility of the Future is also the theme of Utility Week Live taking place at the NEC in Birmingham on 19-20 May. Visit www.utilityweeklive.co.uk for more information. "Co-ordination between different market players can help prevent oscillating market signals and optimise system operation to create a very efficient grid." Randolph Brazier, head of innovation and development, Energy Networks Association Can nuclear costs be controlled? Heat is the missing piece of the decarbonisation jigsaw Smart grids are key to rolling out distributed generation

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