Utility Week

18 | JANUARY 2022 | UTILITY WEEK Heat With increasingly extreme weather events and other external threats facing an ageing grid infrastructure, regulators and network companies are considering how to improve energy system resilience. While governments and businesses are evaluating on- site options, the electricity grid is really the rst responder when it comes to resilience. How, then, can electricity network companies make sure they have what's necessary to improve the grid's ability to resist, react, and repair when severe events occur? At a high level, they can do three things. First, electricity network companies cannot do this alone. Interdependencies with other systems must be included in any resilience planning e• ort. For example, if telecommunication lines go down, utilities cannot communicate with their eld equipment. There are also numerous interdependencies between energy and water, meaning a vulnerability in one sector yields vulnerability in the other. We should also consider the roles other gov- ernment agencies can play in supporting resilience. Whether protecting supply chains or improving multi-jurisdictional coordination, much can be accomplished outside the pur- view of the energy regulator. Second, consideration is needed beyond electricity price controls. Setting aside the broader stakeholder needs of an energy resilience plan, some electricity network investments don't necessarily belong on the shoulders of electricity customers. Putting all of these costs on custom- ers creates a speed brake on any progress made on resilience, and it will mean slower progress than what is reasonably needed. Moreover, some resilience investments are very narrow in geographic implementation but provide bene ts to the public at large. Supporting regional hospitals, rst responders, and even mili- tary bases is about supporting the public good. These types of investments may be better made through taxation than through customer funding. Finally, network companies need a performance metric for energy resilience around which they can plan. The adage "you can't manage what you don't measure" is an ironclad operating principle for electricity networks where every pound put forward in business plans must be defended as an e† cient invest- ment. Using performance-based regulation to create incen- tives around certain outcomes can best leverage resilience metrics, but even more broadly network companies will be able to better justify resilience investments if there is an agreed-upon performance met- ric. Creating a resilience metric is easier said than done, but several models exist that might be applicable. For example, the Institute of Electrical and Electronic Engineers' report "Resilience Framework, Meth- ods, and Metrics for the Elec- tricity Sector" from October 2020 provides both qualitative and quantitative frameworks. An imperfect metric is better than no metric. Contact: Brian.Levite@sandc.com EXPERT VIEW BRIAN LEVITE, REGULATORY AFFAIRS DIRECTOR, S&C ELECTRIC COMPANY Helping network companies tackle energy resilience A recent report called Greener Buildings and Heat Pumps published by the Intellectual Property O† ce stated that "at present" there are "relatively few" patents directly relating to heat pumps being led in the UK, and that this lack of activity "does not re' ect" world- wide activity. French lessons O'Shea points to the French rollout as an example of why higher installations will not automatically result in lower prices, and how incentives can skew the market in the short term but not necessarily encourage real mar- ket growth. According to the French Heat Pump Asso- ciation, the market in that country emerged in the 1980s and remained a niche one until 2008, when it received a boost by the combi- nation of an unprecedented rise in oil prices and the launch of a tax credit that allowed homeowners to claim 50% of the price of a heat pump (excluding installation) as a tax reduction. Installations went from 51,000 units in 2007 to 131,000 units in 2008, with numbers limited by the fact suppliers couldn't meet demand. But až er the subsidy was eventually removed in 2010, installations slid back, to 54,000 units. Since then, the heat pump market has found a niche in the new-build sector, with 40% of new-builds being equipped with one. Consequently the overall market for heat pumps in France in 2018 was between 70,000-80,000 units, and yet the upfront cost for an air source heat pump is largely the same as it currently is in the UK. Opinions are clearly divided in the indus- try over whether the government's 600,000 heat pump installation target is achievable, especially given where the UK is starting from. Even if it is achieved, the level of reduc- tions this can be expected to bring about is still up for debate. If the UK is to learn any lessons from the French rollout, it is that subsidies and modern, well-insulated homes are needed to encourage uptake of heat pumps at a mass scale. This is clearly the government and indus- try's plan, and while it makes sense from a commercial perspective, and means the gov- ernment cannot be criticised for failing to take action in the short term, it does risk ask- ing customers to make decisions before the full suite of options is available to them. While some modern homeowners will be early adopters, it will be those ve million customers for whom heat pumps will be the only option who will be most keenly antici- pating cost reductions, and yet they will be the least likely to bene t from them in the short term. Lucinda Dann, features editor continued from page 13 "There may be areas for the development of UK-specifi c solutions that will help reduce prices." "If the UK is to learn any lessons from the French rollout, it is that subsidies and modern, well-insulated homes are needed to encourage uptake of heat pumps at a mass scale."

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