Utility Week

24 | 24th - 30th June 2016 | utILItY WeeK Sponsored report: Energy flexibility Insight T he UK needs a more flexible power system. This view is fast becoming the prevailing orthodoxy, with the recent National Infrastructure Commission (NIC) report, Smart Power, suggesting that enhanced flexibility could save consumers as much as £8 billion a year by 2030. The three key means of achieving flexibil- ity in the power system are: • demand-side flexibility; • energy storage; • interconnection. An exclusive high-level survey from Util- ity Week, in association with CGI, highlights how, despite broad industry support for these measures, a step change in delivery is required. Industry respondents to the research project, Energy flexibility: Transforming the Power System by 2030, are clear on the stra- tegic significance that flexibility will play in the power system by 2030, but they highlight a range of ongoing practical and policy- based barriers to its achievement. With the greatest barriers to flexibility in the power system tending to arise from the policy and regulatory status quo, the onus is on government and stakeholders such as Ofgem to create a more supportive frame- work. The means to do so have been clearly spelt out by the industry in a number of reports, and the government is due to consult shortly on a range of measures to encourage demand-side response and storage. With a more supportive framework in place, a greater uptake of solutions that deliver flexibility should help overcome bar- riers arising from current limited use and investment – for example, the relatively high cost of some technologies. Definition Flexible power (or smart power in the con- text of the NIC report), means a power sys- tem that can respond to fluctuations in supply and demand created by renewable generation and new, low-carbon, demand- side technologies such as electric vehicles. Such a power system will be created in three main ways: • Demand-side flexibility. Consumers, whether business or domestic, cut their discretionary power use at times of peak demand, or increase their demand at times of excess supply to balance the system (and are rewarded, financially or otherwise, for doing so). • Storage. Excess energy (for example, power generated by intermittent renewable sources) is stored and used at times of peak demand when there is less energy going into the grid than coming out. • Interconnection. Power is purchased from or sold to neighbouring markets at times of excess or shortage, and transmitted through interconnectors. It is worth noting that the Ofgem defi- nition of flexibility in the power system is "modifying generation and/or consumption patterns in reaction to an external signal (such as a change in price) to provide a ser- vice within the energy system". cont p26 Realising flexibility Utility Week in partnership with CGI has conducted exclusive research into industry views on the importance of flexibility in tomorrow's energy system, and how to achieve it. DNOs are the only group to rank interconnection as more important than energy storage. This may be a reflection of the current market rules that preclude DNOs from owning or operating storage. The National Infrastructure Commission's Smart Power report calculates that a more flexible power system could save consumers £8 billion a year by 2030. Such an impressive figure will put significant political impetus behind the move already in train towards a flexible, or smart, power system. " " Illustrative quotes: anonymised quotes from the report's contributors " "

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