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BEIS wants ‘next transformational change’ in energy to push markets beyond the trilemma

Image: BEIS.

Image: BEIS.

The Department of Business, Energy and Industrial Strategy (BEIS) believes the world is “on the cusp of the next transformational change” in energy, and wants the UK to lead it.

Speaking today at the Utility Week Energy Summit, Alex Chisholm, permanent secretary at BEIS, said the energy sector was currently “in the midst of a transformation” as legacy, centralised models made way for a new, more dynamic market.

“From the rise of renewables and small-scale generation, to the digital revolution and our smart meters programme, energy policy is evolving rapidly and challenging historic assumptions,” he said.

Chisholm drew parallels between similar periods of change that have occurred in the past, most notably the advent of privatisation in the energy sector enacted in the 1980s and the subsequent Electricity Market Reform.

He said this delivered the instruments to ensure security of supply and, pertinently considering the direction of Chisholm’s speech, slashed the cost of decarbonised power.

However, Chisholm said it was now the government’s view that there has been too much focus on the so-called energy trilemma – the need to decarbonise at the lowest cost to the consumer possible, while also ensuring security of supply – and its ambition for the ongoing transition to essentially move the UK beyond it.

But in order to achieve that aim, Chisholm said the department’s work to date is “not enough” and that the country must now place itself “at the front of the pack” for the next energy transition.

“We must discern and respond to the changes to the system arising from falling technology costs, increasingly distributed energy sources and the rise of the smart digital energy system. And we must deliver all this while ensuring our costs are as low as possible, ensuring that we are competitive in global markets as we leave the European Union.”

Chisholm went on to discuss the department’s future approach to energy policy which will take into account the finds of Dieter Helm’s somewhat controversial cost of energy review, published last year.

“The role of BEIS is as an agent for this change, creating markets which drive innovation and competition, supporting the conditions for growth, and keeping costs down for consumers,” Chisholm said, before imploring energy stakeholders to collaborate with the government to deliver that change.


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