The energy transition is providing “more ecstasy than anarchy” for the sector, however pragmatic and consumer-centric initiatives must be at the forefront of regulators’ minds if is to continue to succeed.
That was the conclusion of a panel of industry representatives at last week’s All-Energy conference in Glasgow, Scotland, which sought to determine whether or not the ongoing decarbonisation and decentralisation of the power grid would truly benefit consumers.
Charlotte Ramsay, programme director for National Grid’s future of the system operator project, said that decarbonisation was already happening to such an extent that there is “no going back”.
“We’ve made a massive investment as a nation in all of this technology, all of this infrastructure… we’ve got to make sure that this investment has been made strategically and we really maximise the use of the infrastructure that we have, that being networks, generation, storage and demand response,” she said.
But Ramsay equally warned that from a pragmatic perspective, it was equally important that the ‘ecstasy’ of the energy transition was embraced to avoid a “move to anarchy”.
She stressed that this would require National Grid and the other regulator entities to understand that a shift in mind set is needed to embrace the future energy system.
“From the SO [system operator], what we're seeing is this mind set shift is one that's moving away from a singular focus on 'it's just about transmission or networks' to being able to think cross-transmission and distribution, being able to see networks as one solution of many in terms of solving the energy systems' needs and problems,” she said, adding that a central need would be to combine the shift in mind set with “more pressing regulation” to achieve its end goal.
Matthew Knight, head of business development for power and gas and power services at Siemens, remarked that his business had felt both the anarchy and ecstasy of the energy transition in the recent years. He noted that while Siemens had been able to open a turbine factory in Hull, the global market for gas turbines had effectively halved in three years.
That change, he said, had led Siemens to “totally reshape” its business for a low carbon future.
“The completely unprecedented scale of the change, and the speed at which it needs to happen, the absolute transformation of everything we understand about the business models we have around energy over the next few years. I believe that calls for an unprecedented level of collaboration between government and industry, and while we're collaborating we have to take our customers with us.”
Charles Hendry, speaking in his capacity as chair of the Smart Power Industries Alliance, agreed with Knight that consumers must play a central role in the energy system of the future and must be considered in any future policy landscape.
“The role of the consumer is changing the whole time. I think we're moving away from the fact that consumers are passive recipients in whatever their energy companies happen to throw at them. They're now becoming more active participants.
“If we do get it right, then consumers will benefit to a huge degree. But if we get it wrong, and it's done in a haphazard way, then some of the businesses that are installing it [distributed energy] will benefit, but the consumers will lose out in a significant and lasting way, and that will be a damage you can't put right,” he said.