In the report on ‘The future of Britain’s electricity networks’, the committee calls on government to provide strategic leadership to ensure the timely delivery of a smart grid in order to meet its carbon reduction goals. The committee raises concern that Ofgem has granted funding for new grid investment projects before the completion of a fundamental review of how better use can be made of the existing network.
The report said investment in transmission grid is required to avoid delays in connecting new power stations, but the existing regulatory framework may be driving the case for transmission investment presented by the industry at the expense of other options such as demand management.
The report highlights the increase in the cost of managing electricity flows across the system in recent years, and finds that this is caused by inherent flaws in the British Electricity Trading and Transmission Arrangements (BETTA).
The report urged the government to implement a regime to encourage grid capacity sharing, prioritizing renewables, and also facilitating a greater role for energy demand-side management. It welcomes Ofgem’s decision to review the industry’s rule-making process, noting the sector ‘has for far too long forestalled reform in areas such as transmission access’.
Paddy Tipping, MP for Sherwood, said: “Our existing regulatory and policy frameworks, along with the grid infrastructure we currently rely on, were developed to serve the fossil fuel economy of the twentieth century.
“The future looks very different. By 2020 the UK electricity network will need to accommodate a far more diverse energy mix that includes a much higher proportion of renewables that cannot respond so easily to fluctuating demand. The only cost-effective response to these developments is the creation of a smart grid that intelligently manages demand and supply across the energy system.”
