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Action needed to ensure UK doesn’t miss flexibility opportunity, warns Energy UK

Image: Andy Beecroft.

Image: Andy Beecroft.

A new report has called on the government to step up its efforts regarding flexibility in the UK, as it will be "crucial" to reaching net zero.

Trade body Energy UK, along with The Association for Decentralised Energy (ADE) and BEAMA, has produced a new report in an effort to stir the government into action.

Flexibility, from storage and demand side response, could save £8 billion per year up to 2030 according to the report, and between £17-40 billion by 2050 if it is fully realised.

But despite widespread consensus about the importance of flexibility, progress integrating it with the energy system has been “slow and patchy”. The report warns that the UK risks failing to make the most of the opportunity.

As such, the group has made a number of recommendations, in particular calling on the government and Ofgem to develop a new version of the Smart Systems and Flexibility Plan. This was originally released in 2017, and called for a major upgrade of the UK’s energy system.

The report from Energy UK calls for a second document that accurately measures the progress made, as well as sets specific targets and timeframes. It should also show how the government, Ofgem and industry can collaborate to deliver these.

Secondly, the report calls for the government to amend market mechanisms and regulation. These, it says, were designed for the traditional, centralised, one-way energy system, and as such do not create the right opportunities for investment.

As part of this, networks should be barred from providing ancillary services, as they risk hampering development of the flexibility market.

Charles Wood, Energy UK’s head of new energy services and heat, said that a flexible energy system is “essential’ to “get anywhere near net zero.”

“The products, technology and finance are all there but the opportunities and incentives aren’t - meaning business cases for investment aren’t stacking up. Overall demand for power has been falling for some time but the electrification of heating and transport will greatly increase demand at peak times and flexibility will be absolutely essential to cope with this.

“We need to be ready for when that happens which means taking action now – otherwise we risk missing out on the benefits. We’re ready to work with the Government to deliver on all this potential but we need them to give it the priority it warrants.”

The need for greater flexibility in the UK energy network to balance the peaks and troughs created by more intermittent generation has long been acknowledged. This will be caused by both system decarbonisation, as renewables are added to the system, and customer led decarbonisation, as heat pumps and EVs become increasingly common.

In July last year, Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) sent an open letter to the Energy Networks Association, calling flexibility "crucial" to the evolution of energy networks.


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