Utility Week

26 | 24th - 30th June 2016 | utILItY WeeK Sponsored report: CGI energy fl exibility Insight The scale of the challenge facing the power industry was laid bare by the responses to the survey. Respondents believed that fl exibility in the power system must more than double to an average of 8.4 on a scale of one to ten by 2030. The current level of fl exibility is just four, suggesting the indus- try has a signifi cant mountain to climb in the 14 years ahead. The perceived disparity was broadly similar across the three respondent groups – energy companies, distribution network opera- tors (DNOs), and aggregators – though it was marginally higher for aggregators. Respondents were also asked to rate the strategic signifi cance of fl exibility in the power system to their own businesses and to the overall power system – today and in 2030. There was little doubt of the strategic signifi cance of fl exibility by 2030, with an average rat- ing of 9.1. the average rating for the strategic signifi cance of fl exibil- ity to the power system today was considerably lower, at 7 overall. Interestingly, DNOs rated the strategic signifi cance of fl exibility to their business at present considerably lower than aggregators and energy companies, perhaps refl ecting their more traditional role in the power system. Breaking down the three key elements of fl exibility, demand-side fl exibility was seen as the most important, and interconnection as the least important overall. A breakdown of the results by respond- ent groups refl ects stakeholders' diff ering interest: aggregators and energy companies place higher value on demand-side fl exibility, and DNOs are the only group to rank interconnection as more important than energy storage, although only by a small margin. This may be a refl ection of the current market rules that preclude DNOs from own- ing or operating storage. "There is no trade-off between security, aff ordability, and sustainability." Opinion Rich Hampshire, Smart utilities director, CGI UK T he so-called "energy trilemma" of security, aff ord- ability and sustainability has long been at the heart of Britain's energy policy. However, the use of the word trilemma may have underpinned the view that there are trade-off s between these three pillars of policy. With the dialogue moving towards a "whole systems approach" and growing recognition of the signifi cance of fl exibility, in all its forms, we are starting to see the "tri- lemma" give way to a virtuous circle where the progres- sive adoption of low-carbon, demand-side technologies to decarbonise heat and transport and provide energy storage delivers the increased fl exibility required to deal with the intermittency associated with low-carbon generation on the supply side. This report provides the perspec- tive of the sector on fl exibility – its signifi cance today and the clarity of understanding of how and where its signifi cance is expected to grow by 2030. The sector's leaders also identify some of the barriers that will need to be addressed if the full value of fl exibility is to be realised and create that virtuous circle from the three policy pillars. What is clear from the survey is the recognition across all sectors of the degree by which fl exibility in the system will need to increase by 2030 and how it will grow in strategic signifi cance, particularly for distribution network operators (DNOs). Where there is greater degree of diff erence between the market roles of energy companies, DNO and aggregator, is the relative importance of the diff erent sources of fl exibility. The level of importance, at 9.5/10, attached to demand- side fl exibility by aggregators is unsurprising. Perhaps what is surprising is the relative importance placed on interconnection and the lack of importance placed on grid-connected storage by the DNOs. All the market roles identifi ed the signifi cance of the role of storage – both grid-connected and on the demand side – in realising the level of fl exibility the energy system will require. What is perhaps more strik- ing is the optimism across all roles that storage will have reached maturity by 2030. Read the column in full by downloading report. "it is clear the degree to which fl exibility must increase by 2030" Average rating out of 10, where 10 is extremely important n Demand-side storage n Grid-connected storage n Electrifi cation of heat n Microgeneration n Electrifi cation of transport how woulD you rate the importance of the following technologies in fAcilitAting flexibility in the energy system? 7.6 7.6 overall Dno Aggregator energy company 6.5 6.2 6.4 7.8 7.4 5.7 6.1 5.8 8.3 7.3 7.7 6.3 7.5 7.2 7.8 6.8 6.3 6.8

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