SEG responds to Government inquiry into the future of the UK electricity infrastructure

Dr Ralitsa Hiteva has written a blog about the recently submitted SEG Response to the Energy and Climate Change Committee’s inquiry into the future of the UK electricity infrastructure. 


In November 2015, the Sussex Energy Group submitted written evidence to the Energy and Climate Change Committee’s inquiry into the future of the UK electricity infrastructure. The team, including Dr. Ralitsa Hiteva[1], Prof. Tim Foxon, Prof. Paul Nightingale and Prof. Gordon Mackerron, used research carried out in several projects to reflect on the limitations of today’s electricity infrastructure and made recommendations for addressing these limitations. The full document can be found on the ECC’s webpage, and is available for download here: Sussex Energy Group Response to the Energy and Climate Change Committee [PDF 37.6 KB].

The submission discusses a range of institutional and governance challenges of upgrading the UK electricity infrastructure. It highlighted the importance of flexibility and support for non-traditional business models for energy, especially in the context of municipal energy management, for developing a low carbon network. Three economic values were identified that could be realised by a more strategic approach to smart-grid investment on a city-region basis: (1) Renewable energy connection co-ordination; (2) Inward investment stimulus; and (3) Municipal supplier load control.

The SEG submission also argues that a low carbon network in the UK will introduce more flexibility in the governance of demand and supply, and will involve a higher number of mechanisms, and actors, some of which are not-traditional, for the electricity sector. Prosumers (for example, electricity consumers with solar PV on their roofs who produce electricity, sell electricity to the grid and even buy electricity from the grid) are one such category.

A low carbon network will also imply a more advanced level of integration between several sectors (for example, ICT, electricity and vehicles), alongside more symbiotic interactions and spill-overs between them. This will require creating a space for the utilisation of what Ofgem terms ‘non-traditional business models’ (NTBMs) for energy: a term describing a range of business models that differ from conventional forms of generation, distribution and supply.
The paper calls for the Government and Ofgem to further incentivise innovation and development of smart grid technologies by proactively supporting the development of non-traditional business models in low carbon energy networks, along with more traditional models. New business models could include process innovations enabling new ways of distributing value in the supply chain and introducing innovations that create social and environmental benefits. These have the potential to allow new value to be captured from new technology in new ways. This argument builds on a more extensive discussion of NTBMs in the energy sector submitted in response to an Ofgem inquiry (insert link here) in May 2015.

[1] The contribution to this response is accredited to work funded through the Infrastructure Transitions Research Consortium (ITRC) and the International Centre for Infrastructure Futures (ICIF) on the governance for smart grid innovations and business models transformations in UK infrastructure sectors.


About the author:

Dr Ralitsa Hiteva Dr Ralitsa Hiteva is part of a team in the International Centre for Infrastructure Futures (ICIF) which investigates changes to the business model of infrastructure delivery and operation at national and urban scales. She is working on developing comparative case studies between sectors and countries. Previously, Ralitsa was part of the UK Infrastructure Transitions Research Consortium (ITRC) and worked on governance and regulation related to interdependencies between UK Infrastructures for the energy, water, transport, waste and ICT sectors.

Ralitsa’s research focuses on development of low carbon energy infrastructure, particularly smart grids and low carbon vehicles; connection and transmission of renewable electricity and natural gas; and smart cities. Ralitsa is a member of the Sussex Energy Group.

 

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