REA: Ofgem failing to realise crucial role of flexibility in reaching net-zero
With the UK's energy system becoming increasingly "democratised" and businesses and individuals generating and selling, as well as buying, energy, regulator Ofgem is not taking sufficient measures to bring about a flexible energy future.
That is according to the Renewable Energy Association (REA) and ElectraLink, which have this week published a joint report revealing that the amount of energy generated and ‘exported’ back to the British grid doubled between 2012 and 2018.
Called ‘Flexible Futures’, the report reveals that more than 60% of exported power in Britain now comes from generation methods with varying outputs, such as wind and solar.
It additionally states that more than three million UK households are now customers of energy companies which offer exclusively “100% renewable” electricity packages, with such offerings also gaining popularity in the business space – particularly heavy industry, manufacturing and retail.
As this renewable power comes online, and with businesses and individuals alike beginning to act as “prosumers” rather than passive consumers, the report calls on regulator Ofgem and the central Government to bolster support for flexible energy technologies such as battery storage, electric vehicle (EV) infrastructure and onsite solar.
Specifically, it criticises Ofgem’s ‘Targeted Charging Review’ reforms. Launched in 2017, the reforms aim to assess how residual network charges should be set and recovered – but the report claims they are “damaging” and will “undermine the deployment of flexible energy technologies”.
“To meet net-zero, we will need more power generation than we have today, but as nuclear and coal come offline there is a lack of policy that will fill the gap,” the REA’s report author Daniel Brown said.
“Industry models forecast that electricity from technologies such as wind and solar will be crucial for delivering net-zero. For the first time, the Flexible Futures data gives us an indication of the extent to which they are being deployed at the more local distribution networks, rather than at the transmission level.”
The report’s findings echo those of a similar recent study from think tanks Green Alliance and Localis, which concluded that central Government and Ofgem are not currently doing enough to support local authorities in reaching net-zero.
The heat is on
Another major report on the decarbonisation of energy this week, from trade body Liquid Gas UK, outlines how the UK could decarbonise off-grid heating in line with climate targets, while delivering £7bn of cost savings.
Called ‘A Practical Approach: Analysis of Off-grid Heat Decarbonisation Pathways’, the report posits a mixed technology approach to decarbonising heating systems for the UK’s 1.5 million off-grid, rural homes.
Such an approach should prioritise the uptake of heat pumps and bio LPG, the report claims. It states that electrification should not be relied on as the sole solution, as heat pumps are “notably more expensive than other options and will also make the installation of retrofitting measures, such as insulation, double glazing and temperature controls, even more necessary”. Liquid Gas UK is notably targeting 100% biofuel by 2040.
In order to support this transition, the report recommends that the central Government launches scrappage incentives for oil boilers and oil tanks, which are currently used to heat 1.1 million homes.
“We need to kick-start the deployment of low carbon heating options with a policy framework that supports a mixed approach as clearly this is the best option for consumers,” Liquid Gas UK’s chief executive George Webb said.
“For homes off the gas grid, a mixed technology approach is a pragmatic and credible route to meeting these targets by delivering a 90% reduction in emissions, while saving over £7billion in costs to homeowners. Due to costs and preserving homeowners right to choose, Government should not prescribe a one-size-fits-all approach to decarbonising off-grid homes.”
Heating and hot water account for around 15% of the UK’s overall carbon footprint, with the nation currently off-track to meet a key target of ensuring 12% of heat is generated using renewables by 2020.
The Government has previously run a number of clean heat initiatives, including a £320m package of grants and loans for businesses, hospitals, schools and local authorities with a heat network of two or more buildings and an Energy Systems Catapult centre to assist small and medium-sized businesses (SMEs) with decarbonising their heat systems.
However, the Committee on Climate Change’s (CCC) recommendations to Government on meeting net-zero by 2050 state that “serious plans” for new legislative frameworks and financial incentives for low-carbon heat will need to be developed.
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