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NETWORK / 8 / MAY 2016 W hen chancellor George Osborne launched the National Infrastruc- ture Commission in the autumn of last year, it had been a long time coming. The creation of a politically neu- tral body capable of carrying out long-term thinking about mammoth, capital-intensive civil and industrial engineering projects is something that businesses leaders across sectors have wanted for decades. Over the years, many of them have been le• bruised and disheartened by the effects of politi- cal whim (or expediency) on their ability to attract investment and deliver projects. Policy wonks finally woke up to the seri- ousness of this need for long-term thinking in 2013 when Labour leader Ed Miliband commissioned Sir John Armitt to scope out what a National Infrastructure Commission might look like. The idea crossed party lines following Labour's defeat in the 2015 gen- eral election and the Conservatives named Labour peer Lord Adonis chair of its com- mission in early October. With such a back catalogue of frustrated expectations, the National Infrastructure Commission (NIC) has a lot to live up to and the pressure is on to prove it can make a tangible impact on the efficiency and co- ordination with which the UK approaches its increasingly complex infrastructure needs. Philip Graham, who was named chief executive of the NIC in December, is keenly aware of this expectation and also of the need to prove to many interested parties that it is not "a transport commission in disguise" – a preconception which it would be easy to perpetuate given his own back- ground in the rail industry, coupled with Adonis's past as transport secretary. It was partly with these considerations in mind that the NIC made sure smart power was among the first and most meaty of the topics addressed in its research agenda. "The report needed to make an impact," Graham says by way of opening as he meets with Network in a nondescript, windowless office in the Treasury where the NIC has its temporary HQ. "There was a risk that the NIC was going to be seen as about 'building stuff '. That will be part of it, but as we come to terms with that fact that we've squeezed as much as we can out of existing infrastructure – at the same time as facing a capacity crunch and acknowledging a finite budget for building – we must look at options alongside that for getting greater efficiency, for managing demand, for pricing things correctly. To my mind, that is where a National Infrastruc- ture Commission can really add value, by bringing that holistic look at all of those things rather than being about just project delivery." Published in March, the NIC's Smart Power report is the result of a "streamlined" but intense research process into the future of the UK's power system and its require- ments for greater flexibility. The report was warmly received by government and indus- try and made a number of pivotal recom- mendations for reform of the market and regulatory structures. It said these were needed to facilitate energy system transfor- mation and create a national energy infra- structure that was fit for purpose in a future defined by a low carbon, high productiv- ity society with increasingly decentralised generation (see p9 for a summary of Smart Power findings and recommendations). Smart power and energy storage The report pulled no punches in addressing potentially controversial elements of this transformation agenda, including the poten- tial for an independent system operator. It also pushed out a challenging figure for the potential consumer savings to be had from the realisation of greater system flexibility: £8 billion by 2030. Explaining where that figure came from, Graham acknowledges the input of experts at Imperial College London. The NIC's cal- culation is based on projections of what it would cost to deliver the generating capac- ity needed to meet current peak power demands if the electricity system were to continue to be operated as it is today out to 2030, he says. "We began to think: OK, that's what it's going to cost to deal with continuation of this very peaky system. What about if I introduce some greater flexibility by having greater demand-side flexibility that starts to shave off some of those peaks? How much does it reduce the generating requirement? If you can shave that peak further through storage measures, how does that start to bring the cost down? If you can deal with intermittency through storage, how does that bring the cost down?" Add in the costs of building storage, establishing demand-side technologies and – the third prong in the NIC's roadmap to system transformation – constructing an array of electricity interconnectors, and still the consumer bill "pales into insignificance compared with the cost of providing gener- ating capacity for the current demand pro- file", says Graham. Of course, there are reasons why these elements in an electricity system revolu- tion are not flying ahead already, and over- whelmingly these relate to market and regulatory obstacles which stop potential market participants being able to stack up sufficiently attractive business cases – particularly in the case of energy storage deployment. Graham is clearly an energy storage enthusiast, relaxing and brightening up as he talks about the time the NIC team spent exploring an array of different storage tech- nologies, from compressed air and liquid air storage to flow batteries, flywheels and super-capacitors. Apart from indulging a fascination with this "exciting and interesting" technology arena, the endgame of this exploration was not to "pick winners" Graham emphasises. It was to understand the landscape of play- ers that regulation might need to accom- modate, and to set a realistic timescale for Ofgem and Decc to identify the changes they would need to make in order to effect change. The timescale that Smart Power recom- mends is uncomfortably tight by the stand- ards of government departments, but should lead to an agreed agenda of reform being announced in the spring of 2017 following a consultation with industry (now ongoing). Among the changes which the storage industry has called for most vocally to date is to overturn the current licence conditions for storage that see it classified as both an end user and a generator of electricity and hit twice, therefore, by system charges. → INTERVIEW Among the NIC's big group of august commissioners is Demis Hassabis, the co-founder and chief executive of Deep Mind, which recently won international acclaim when its artificial intelligence platform beat the world champion of the ancient Chinese game of Go in a best-of-five contest in Korea. The victory was hailed as a milestone in the evolution of AI programming, indicating that levels of automation and machine learning previously thought impossible, could now be attainable. DID YOU KNOW