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UK industry to entrust utilities rather than installers with smart energy transition

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Image: Bywaters/M3 Solutions.

A majority of commercial and industrial (C&I) firms in the UK would trust their energy suppliers with the installation of smart and distributed energy systems rather than installers, a new survey has found.

Big Four consultancy PricewaterhouseCoopers (PwC) surveyed more than 500 businesses in the UK and found that more than a third of industrial firms – as well as circa 20% of commercial enterprises – intended to invest more than £1 million in smart and distributed energy technologies over the next five years.

These systems would include on-site renewables such as solar and wind, biomass boilers, demand side management and energy storage.

But rather than entrust this work to engineering and installation firms, more than half (55%) of those surveyed said they would prefer this work to be conducted by their energy supplier.

This led Steve Jennings, power and utilities lead at PwC, to suggest that energy companies would have a “major role” to play within the wider smart energy transition within the C&I space.

“Costs are a prime concern for UK firms as is their lack of confidence in the speed at which returns will materialise. Unless addressed, these issues will continue to influence both the level and pace of smart energy adoption across the UK business community,” he added.

PwC’s survey found that 59% of firms were concerned about energy prices and associated taxes and levies, a figure which was particularly pressing among industrial and commercial businesses.

This was borne out in more of the survey’s results, particularly that 74% of SMEs said price was the main reason for firms to have switched energy suppliers.

Just less than a fifth (17%) of industrial respondents meanwhile said they intended to produce all or nearly all of their own power within the next five years, indicating the potential for on-site renewables.

“Although only around a fifth of industrial customers intend to significantly reduce their dependence on the grid, this represents a significant challenge for the network planners and operators responsible for delivering sufficient levels of capacity, flexibility and balancing to accommodate these large occasional users, who in many cases will also be exporting back into the grid,” Jennings added.

The survey results lend weight to an increasing number of utilities regarding themselves more as broader service companies rather than pure suppliers and also give credence to utilities embracing renewables and storage.

Earlier this year Centrica unveiled a £19 million pilot project, taking place in Cornwall, which will equip businesses in the region with energy storage technologies and connect them to a local smart grid alongside renewable generators, while the likes of innogy and E.on have placed decentralised, low carbon power at the heart of their strategies moving forward.

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