The Energy Technologies Institute (ETI) has commissioned four industry experts to examine options for ‘whole system’ reform, given the mounting pressure on UK power grids. A more decentralised dimension to decisions on energy networks was agreed on by all experts – though there are differences on governance.
There is a clear need to substantially adapt and enhance existing network infrastructures, create efficient new network infrastructures (for example, new city-scale heat networks) and integrate different networks to operate together in real time as a ‘system’, enabling the efficient transmission, storage and use of energy in different forms.
“Much of the current debate is about new electricity infrastructure, but our work on the UK’s low carbon future suggests that we may also need completely new kinds of energy networks, like heat networks, working together with existing networks.
“So we’d like to see more emphasis on looking at the ‘whole system’ nature of the challenges for how we govern and regulate the billions of pounds of investment in energy network infrastructure needed for the UK’s transition to a low carbon future,” George Day, ETI’s head of economic strategy commented.
Looking beyond ‘vector-specific’ regimes
Markets and competition are seen as key to bring forward “the right kinds of investment, but experts envisage a rather wide variety of mechanisms for this. Far-reaching changes were proposed in how investment decisions are governed, incentivised and regulated – notably a shift away from the beyond the current ‘vector-specific’ statutory regimes covering gas and electricity.
The four expert perspectives have been produced by:
- Jorge Vasconcelos (Chair of New Energy Solutions, formerly Chair of the Portuguese energy regulator and founder and chair of the Council of European Energy Regulators)
- Bob Hull (now with KPMG, formerly Managing Director of Ofgem eServe and other senior positions at Ofgem)
- John Rhys (of the Oxford Institute of Energy Studies, formerly NERA Economic Consulting and the Electricity Council)
- Keith Maclean (Chair of UKERC, Co-chair of the Energy Research Partnership and formerly Policy and Research Director at SSE).
Over the course of the coming months, the ETI will also publish a series of insights that explore the practical, logistical and engineering challenges for energy networks raised by the transition to low carbon futures.