David Smith: Turning up the network heat

It was a busy summer for our energy future, including the start of the RIIO 2 process for network regulation, an independent review of electricity costs, a commitment to clean transport, and the publication of the BEIS/Ofgem Smart Systems and Flexibility Plan in July.

The plan is the response to a wide-ranging consultation on the energy system. Ofgem and the industry want to deliver a smarter system which delivers for customers and the UK economy. It will give important direction to the development of a smart, flexible energy system that will reduce costs for homes and businesses.

While the publication is an important and significant step, the industry is already taking action. Delivering our energy future, and ENA members across gas and electricity, will be vital in a smart, integrated system. Innovation in our network sector, enabled by the Low Carbon Network Fund and RIIO framework, has provided technical understanding of a range of technologies and the role they could play in our future system.

Network companies across the transmission and distribution level are now working together to take the practical steps necessary to transform our system through the Open Networks Project.

Launched in January 2017, the Open Networks Project will lay the foundations of a smart energy grid in the UK. The project brings together all eight of the UK’s electricity network operators, including National Grid as the System Operator, the Department for Business, Energy & Industrial Strategy, and the energy regulator Ofgem, as well as leading academics, trade associations and NGOs.

In its first year Open Networks has already made significant progress in conducting a complete assessment of the parts of the electricity grid that need to change, and providing options and timelines for delivery. We have provided a definition of the Distribution System Operator (DSO) role that will see local network operators take on more active management of the network traditionally seen at the transmission level.

In August, the project launched an important consultation on how a smart electricity grid can facilitate new markets and opportunities for distributed energy technologies including battery storage, solar panels and services such as electric vehicles to grid demand response.

These technologies and services have huge potential to not only make our electricity grid cleaner and reduce cost, but also to give customers greater control over their energy use. The consultation will seek views on how network operators will procure and dispatch services from distributed energy resources to operate the system, and how new players can access markets and participate in a smarter energy network.

Decarbonising heat, which accounts for around half of our energy demand, is perhaps the most difficult energy challenge that we face. Given the scale of the challenge, it is likely that decarbonising gas will play an important role, alongside greater electrification in some areas. There is a growing body of independent evidence which supports a whole system approach with a significant role for green gas, over a full electrification option – which seemed to be favoured only a few years ago.

A truly smart energy system will only be reached through a whole system approach which recognises the vital role of the gas networks, alongside the electricity networks, as well as considering the interdependencies between power, heat and transport. The gas network connects 85% of properties to a resilient, reliable energy delivery system and will have a significant role to play in our energy future.

In the same way that the roles and responsibilities of electricity network operators are changing to meet new challenges, the way that we provide heat to homes and businesses and the role of the gas networks will have to change if we are to meet our decarbonisation targets.

Gas network companies are playing their part by exploring the exciting potential for hydrogen, as well as biomethane. By exploring innovative ways to use the existing gas network infrastructure, we are increasing options for policymakers as the Government looks to develop a heat strategy which will overcome this significant challenge.

The tangible progress being made towards a smart energy future across gas and electricity is good news for customers. We need the capacity, storage and flexibility of the gas network, alongside a smart electricity grid, in an integrated energy system, if we are to continue to deliver reliable, secure and affordable power, heat and transport for customers in the future.

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