The PSI Blog

Are smart grids the way to sell low-carbon policy to sceptics?
Nazmiye Balta-Ozkan, with contributions from Tom Watson

I was invited to take part in a panel discussion at a fringe event, ‘Smart Grids: Is this the way of selling low-carbon policy to sceptics?’, at the Labour Party Conference on Sunday 22 September. The event was organised by the New Statesman magazine and supported by Energy Networks Association. The discussion was chaired by Jon Bernstein, former deputy editor and digital director of the New Statesman. Besides myself, the panelists also included Tom Greatrex MP, shadow minister of state for the Department of Energy and Climate Change; the Green Party’s Jason Kitcat, leader of Brighton and Hove Council; and Basil Scarsella, CEO of UK Power Networks.

Basil began by discussing how distribution costs make up just a small part - about 16 per cent - consumer energy bills. He highlighted how smart grids might help us meet security of supply, affordability and sustainability objectives. Jason elaborated on how smart grids can lead to the democratisation of energy production and consumption and the empowering of consumers, drawing on his experience of trying to fit Brighton’s large social-housing stock with solar panels.

I spoke about the wider non-climate benefits of smart grids: the reduction of bills (through reducing peak demand and so the need to build new power plants), the opening up of new business opportunities by transforming large volumes of data into information that has value, and improving the resilience of the energy system to shocks (either manmade or natural). I identified three challenges: policy coordination and coherence, consumer concerns on data privacy, and fairness.

There were interesting questions raised by the audience, most of them directed to Tom Greatrex (maybe not so surprisingly). Question topics included the community benefits of large infrastructure projects (for example, heavy traffic being borne in communities where a new nuclear power plant construction is planned) and information collected by smart meters.

Among all the questions that were discussed, I want to highlight a few. One of these was whether we could expect demand-side management measures to be mandated vs an incentive-based approach. While there was resistance from the panelists to forcing such policies on consumers, and incentives were thought to be a better solution, findings from our recent public workshops show that the public do not replace appliances until they stop working. Given the long lifetime of appliances, therefore, some product-standards legislation may be necessary in order to speed up the introduction of smart appliances. 

Panelists also discussed the conflict between network operators and energy suppliers when there is lots of wind-generated electricity in the system: cheaper electricity may increase demand, which in turn could cause problems for the networks. I must say I didn’t hear a clear response to this and it is one of the areas that I expect will become a key issue in the coming years as we move to more dynamic tariffs.

Finally, a vital issue was the one of fairness - or how we ensure that householders who have limited means to access technologies that will enable them to shift their energy use or whose lifestyles are bound to certain routines are not penalised. Jason linked this to his experience of installing solar panels in council estates: only those whose house faces the right direction are able to benefit. This is complicated further still by the fact that one third of UK householders are tenants, and the division of costs and benefits between tenant and landlord is still a significant obstacle.

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