Transcript HOW ENERGY EFFICIENCY POLICY CAN CONTRIBUTE TO …

SMART GRID DEVELOPMENTS IN THE UK
CLEAN ENERGY, GOOD GOVERNANCE AND ELECTRICITY
REGULATION
CAPE TOWN 19 -21 MAY 2010
DR GILL OWEN, PROJECT DIRECTOR,SERN,
WARWICK BUSINESS SCHOOL, UK
OUTLINE OF PRESENTATION
• Role of REEEP and SERN
• UK sustainable energy policy context
• UK policies for renewable energy,
energy efficiency
• Smart meters
• Smart grids
WHAT IS REEEP ?
• Renewable Energy and Energy Efficiency
Partnership -Initiated by UK at World Summit on
Sustainable Development, 2002
• Coalition of progressive governments, businesses
and organisations - to tackle policy and financial
barriers to energy efficiency, CHP and renewable
energy – sustainable energy
• Aims to improve energy security, foster economic
growth, support greater social equity and reduce
environmental impacts of energy consumption and
production.
SUSTAINABLE ENERGY REGULATION
NETWORK(SERN)
• Sustainable energy regulation network (SERN) - for
those involved in energy market and monopoly
regulation - regulators, government departments and
other stakeholders. Facilitates information exchange
between regulators and others to :
• secure greater understanding of the benefits of
energy efficiency,renewable energy and distributed
generation (sustainable energy)
• secure regulatory mechanisms that incentivise
sustainable energy
• SERN activities : Policy and regulatory review; good
practice guides & case studies;E mail network and
database; training and capacity building
UK SUSTAINABLE ENERGY
POLICY CONTEXT
• Climate Change Act 2008 commits the UK to at least
an 80% reduction in greenhouse gas emissions by
2050, compared to 1990 levels.
• The Government has put in place a set of five year
carbon budgets to 2022 and set out action plans to
achieve the targets within those budgets (July 2009 ‘The UK Low Carbon Transition Plan – National
Strategy for Climate and Energy’)
• Despite change of Government in May 2010 this
context unlikely to change significantly – cross party
agreement.
• Range of policies for different sectors (households,
businesses etc) and for energy efficiency and
renewables – these may be subject to some change.
UK RENEWABLE ENERGY
POLICIES
• The UK has signed up to the EU Renewable Energy
Directive - a UK target of 15 percent of energy from
renewables by 2020. Electricity target is 30%.
• Equivalent to a seven-fold increase in UK renewable
energy from 2008 levels: the most challenging of any
EU Member State.
• Policies include the Renewables Obligation (since
2000) and now (2010) feed-in tariffs for small scale
renewable electricity.
• Renewable heat incentive (feed-in tariff for heat)
from 2011.
ENERGY EFFICIENCY POLICIES
• Carbon Emissions Reduction Target (formerly
Energy Efficiency Commitment - since 2002).
• Electricity and gas suppliers have targets to reduce
energy use and emissions amongst household
customers – subsidise energy saving measures to
achieve this. Main measures have been CFLs, loft
and cavity wall insulation.
• Previous and new Government have plans to scale
up investment in energy saving via whole house
upgrades – probably delivered via energy suppliers.
• Looking for integration of incentives for renewables
(feed in and RHI) and energy saving – links into
smart grid idea.
KEY CONTEXT FOR SMART GRID
DEVELOPMENT - SMART METERS
• EU Energy Services Directive – May 2008. Requires
accurate and informative metering – a key driver for
smart meters.
• All businesses and homes should have gas and
electricity smart meters by 2020 – consultation on
roll-out model.
• The Government’s Meter Impact Assessment
identifies energy savings (via improved feedback and
new tariffs that incentivise demand response)as the
largest economic value in the overall analysis of
benefits from smart meters.
WHAT IS A SMART METER ?
• Measures energy consumed - quantity and when
• Two-way communication – meter-supplier
• Stores data electronically and transfers it to a data
collector / utility
• Can facilitate various tariff options e.g. time of use,
rising block etc – to incentivise demand response
• Can have a user friendly customer display for
consumption and tariff information conveniently
located – again helps stimulate demand response
• Meter on-site generation (e.g. small scale
renewables) – link to feed-in tariffs
UK SMART GRID DEFINITION
• A Smart Grid can integrate actions of generators and
consumers to deliver sustainable, economic and
secure electricity supplies.A Smart Grid employs
communications, innovative products and services,
intelligent monitoring and control technologies to:
• Facilitate connection of generators of all sizes and
technologies
• Enable demand side to play a part in optimising the
operation of the system
• Provide consumers with more information and choice
• Significantly reduce environmental impact of
electricity system
• Deliver reliability, flexibility, quality and security
CHALLENGES DRIVING SMART GRID
DEVELOPMENT
• Smart grids could enable a radical change to power
system and accelerate carbon reduction.
• Enable demand-side response - fast alternative to
carbon-intensive generation and reduce need for grid
reinforcement. Lower cost of low carbon transition.
• Help provide cost-effective management of
intermittent renewables and integration of transport
and heating electrification
• Facilitate real-time balancing – will become more
important due to intermittent generation,
• Energy security - increasing network capacity to
manage technical risk of connecting new generation
and changing demand patterns
LOW CARBON NETWORKS FUND
• 2009 Distribution Price Control Review (DPCR5) by
Ofgem – to establish incentives, revenues and
expenditure allowed for the Distribution Network
Operators (DNOs) from 2010-15.
• Included a £500m Low Carbon Networks Fund to
support ‘large-scale trials of advanced technology
including smart grids’
• Bids for the Fund have to be led by DNOs
• DNOs encouraged to partner with suppliers,
generators and others to explore how networks can
facilitate take up of electric vehicles, heat pumps,
micro-generation and demand side management,
and the opportunities smart meters will provide to
network companies.
CONCLUSIONS
• Smart grids attracting a lot of interest, given their
potential to assist with two key energy policy goals –
security and reducing carbon emissions
• Key potential is to integrate demand and supply side
to deliver energy security and a low carbon economy
cost effectively
• Developments in the UK, as in most other countries,
are at an early stage
• Installation of smart meters and policies such as the
Low Carbon Networks Fund (many countries have
similar initiatives) should help to make the transition.
CONTACT DETAILS
• Dr Gill Owen, Project Director, SERN
• Centre for Management under Regulation,
University of Warwick Business School, UK
• [email protected]
• www.reeep.org
• To join SERN - send an E mail to
[email protected]