In October 2015, the National Infrastructure Commission was asked to consider how the UK can better balance electricity supply and demand, aiming towards an electricity market where prices are reflective of costs to the overall system.
The Commission’s final report, Smart Power, concludes that innovations, interconnection, storage, and demand flexibility could together save consumers up to £8 billion a year by 2030, help the UK meet its 2050 carbon targets, and secure the UK’s energy supply for generations.
The report makes practical recommendations to this end – not new subsidies or substantial public spending – but towards the creation of a level playing field and a better managed network:
- government should pursue additional interconnectors with other European countries where the benefits are most significant
- the UK should become a world leader in electricity storage systems. Two steps are required: a review of the regulatory and legal status of storage, removing outdated barriers to be completed by Spring 2017 and implemented as soon as possible, and Ofgem should encourage network owners to use storage
- the UK should make full use of demand flexibility by improving regulation, informing the public of its benefits and piloting business models.
At Budget 2016 the government accepted the report in full.
Smart Power makes recommendations to ensure our electricity system is fit for the future.