Energy storage is to be reclassified within the Electricity Act to address issues including double charging. The move is among a raft of government proposals designed to facilitate the shift towards a smart energy system, or smart grid.
As part of those plans, distribution network operators (DNOs) will not be allowed to own storage, as government and regulator feel that would distort market outcomes. Meanwhile, the department for business, energy and industrial strategy (Beis) said it will also set out how storage can be collocated with renewable generation without jeopardising existing subsidies for such plant.
Beis said it will also commission a feasibility study to look at local flexibility markets and how these might work. Potentially, in some cases, without DNOs needing to be involved in providing price signals.
The paper also suggests mandatory half hourly metering and settlement down to household level is on the cards, although the timing on that decision has been pushed back. Such a move would fire the starting pistol for domestic demand-side response markets and Beis plans to launch a domestic DSR competition in Autumn 2017.
To open up the domestic market will require responsive household goods. Beis said it would drive industry to collaborate with the EU and US on standards and interoperability for smart devices, as well as setting standards for electric vehicle charge points.
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Encouraging the use of battery storage and localised on-site generation is to be welcomed, as this will be a key part of the UK’s future energy mix. However, the Government still lacks any coherent energy strategy and there is very little in place to help consumers now. The gap between the ‘big six’ energy companies’ fixed price deals and their standard variable tariffs has widened by more than half since November.
It’s time for Ofgem to take action to help customers. A campaign to encourage more people to switch, especially the large number of small businesses who are still on standard variable tariff, is urgently required. A price cap isn’t the solution as energy suppliers will compensate for their lost ability to charge customers on more expensive tariffs by instead increasing the prices paid by those on the lowest rates.
Ofgem needs to act now to increase awareness and make it easier and more transparent for customers to switch.
– Phil Foster, managing director, Love Energy Savings