Utility Week

UTILITY Week 20 05 16

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/680922

Contents of this Issue


Page 8 of 31

UTILITY WEEK | 20TH - 26TH MAY 2016 | 9 Interview D espite having a former transport secretary for a chair and a chief executive whose prior career is dominated by notable work for the Department for Transport, the National Infrastructure Commission (NIC) is not "a transport commission in disguise", promises Philip Graham as he meets with Utility Week in a nonde- script, windowless back office of the Treasury where NIC has its temporary headquarters. To prove this, among the first outputs of the NIC, which was launched in late 2015 to bring much-needed long-termism to national infrastructure planning, was Smart Power. The report was widely welcomed by indus- try and explored many of the most challenging and excit- ing elements of the energy system revolution we all know is afoot. "It was probably the most important piece of work we could have done," observes Graham – namely because having low-carbon, flexible yet secure power supplies is fairly fundamental to all other infrastructure futures that the commission will look at. Smart Power, published in March, pushed out an ambitious £8 billion a year figure for the amount of con- sumer savings that the creation of a more flexible and responsive power system could realise by 2030. It also set out a three-pronged strategy for realising this flexible future – increase interconnection, deploy energy storage and enable demand-side markets. The report set out some challenging targets and details around these three elements and it has already elicited results in terms of shaping policy and regula- tion. Government has accepted its call for an increase in planned interconnection projects, raising its target for added capacity from 5GW to 9GW. Meanwhile, the Department of Energy and Climate Change (Decc) and Ofgem have embarked on a consultation to find ways of removing the barriers Smart Power identified to freer deployment of electricity storage. Smart Power also contributed to the growing debate around the future of National Grid as the system opera- tor, expressing support for the movement towards greater independence for the system operator, but stop- ping short of advocating any radical action in the short term to strip National Grid of this function. Graham clearly enjoyed the "intense" and "stream- lined" process of pulling Smart Power together. He shows an intuitive understanding of the size of opportunity for whittling down the costs associated with our energy future. The £8 billion a year savings figure put forward by the report is based on a calculation run by Impe- rial College London of the amount that will need to be invested in generating capacity in order to meet demand out to 2030. Based on this "we began to think, okay, that's what it is 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 flex- ibility 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 constructing an array of electricity interconnectors, and still the consumer bill "pales into insignificance compared to the cost of provid- ing generating capacity for the current demand profile", says Graham. It's not just the grand vision that interests him though, but the detail too. Forming part of a rapidly growing fan base, Graham is an energy storage enthusi- ast, brightening as he talks about the time the NIC team spent exploring an array of different storage technologies from compressed air and liquid air storage to flow batter- ies, flywheels and supercapacitors (see p20 for develop- ments in the storage market). Conducting this research was "exciting and interest- ing" he admits, although he promises that the NIC is not in the business of "picking winners" – merely establish- ing a feel for the breadth of technologies that will need to be taken into consideration as market structures are adapted to allow a bigger role for storage. Among the changes the storage industry has called for most vocally to date is to overturn the current licence conditions for storage, which see it classified as both an end user and a generator of electricity and hit twice, therefore, by system charges.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 20 05 16