With the increased focus on alternative forms of energy and the need for efficient delivery, Britain's electricity grid has come under close scrutiny. The Department of Energy and Climate Change (DECC) has issued a call for evidence for its forthcoming inquiry into the future of the electricity network, announcing on the 4 March that, according to a report published by the Electricity Networks Strategy Group, up to £4.7bn investment could be required for upgrades.
On 6 February, DECC issued its call for evidence in support for its inquiry into ‘how Britain’s networks will need to adapt in response to future changes in the generation mix, and the role of the Government and Ofgem in facilitating this, and the potential for a supergrid,'
The Energy and Climate Change Committee specifically called for evidence on:
- what the Government’s vision for Britain’s electricity networks should be;
- how to ensure a flexible regulatory framework to manage uncertainty over the future generation mix;
- identifying obstacles that need to be overcome to ensure a sufficient network capacity is in place to connect a large increase in onshore renewables;
- any concerns that the Government and Ofgem need to address if a cost-effective offshore transmission regime was to be established;
- the benefits and risks associated with greater interconnection with other countries and the proposed ‘supergrid’;
- the challenges to Britain’s electricity networks that would result from higher levels of embedded distributed generation;
- the expected costs of upgrading Britain’s electricity networks and how they would be met;
- how the regulatory framework could ensure sufficient investment amidst the financial crisis, how it could encourage network operators to innovate, and what potential is there for smart grid technologies;
- whether research and development and innovation was receiving the necessary investment for transmission and distribution technologies; and
- identifying what the UK could learn from other countries’ management of their own electricity networks.
The Committee says it anticipates that its inquiry will feed into Ofgem's long-term review of the regulatory framework for Britain's energy networks. The deadline for the submission of written evidence is 18 March 2009.
'OUR ELECTRICITY NETWORK: A VISION FOR 2020'
The Electricity Networks Strategy Group's report: Our Electricity Transmission Network: a vision for 2020, published on 4 March, concludes that some 1,000 kilometres of new cables will be required in the biggest expansion of the grid since the 1960s to ensure new renewable energy capacity and nuclear power stations are connected to the electricity grid.
Connecting up to 35GW of renewable and up to 10GW of new nuclear power will require a major upgrade of the electricity networks. The report indicates that work needs to start now to upgrade the existing grid and includes proposals for high voltage subsea cable links between Scotland and England.
Commenting on the report, Energy and Climate Change Minister, Mike O'Brien said:
"This report marks the start of the electricity grid's makeover to accommodate new low carbon power generation which is needed by 2020. This is a massive long term investment opportunity and this upgrade work will help support jobs across the low carbon economy. Having a grid which is fit for purpose is vital for our ambitions to cut carbon emissions and increase security of supply."
Ofgem expects that the participating suppliers will begin implementation of the accreditation scheme immediately, with a view to accrediting green tariffs by Summer 2009. This process will be overseen by Ofgem to ensure that the structure adheres to the key principles outlined in the guidelines. Suppliers will be meeting with Ofgem this month to begin implementation discussions. This process may lead to detailed accreditation scheme rules which could be appended to the guidelines.
Review of commercial and charging arrangements
In a request made on 17 February, Ofgem has asked the National Grid to review the commercial and charging arrangements relating to electricity transmission constraints. The aim, outlined by Ofgem transmission director Stuart Cook was to, "more effectively manage the costs of constraints, and ensure any constraint costs were recovered on an equitable basis from customers, suppliers and generators".
Particular concerns included rising costs together with delayed generator connections in Scotland resulting from the planning process and the need to reinforce the grid.
Ofgem proposes licence modifications for distributed energy developers
On 6 February Ofgem published a statutory consultation and guidance document, proposing a modification to standard licence conditions for distributed energy (DE) developers. The proposed modification would permit DE operators to 'supply' electricity to customers without the need to enter into all the industry codes usually required. The DE operator would instead enter into arrangements with a third party licensed supplier who would arrange for the electricity to be conveyed through the public network, complying with all necessary codes.
The modification could potentially open up the market to small-scale suppliers for whom previously the cost of compliance with regulatory and industry codes was prohibitive. Ofgem has said the arrangement would also fulfil better regulation principles by allowing smaller participants to become licensed suppliers in a manner proportionate to their size and impact. However, Ofgem stopped short of requiring licensed suppliers to provide the services required to make the proposals work. Instead, a number of working groups are to be established.