A new report has shown that UK’s electricity networks lead all their competitors in Europe for supporting and delivering flexibility services.
The report, commissioned by pan-European trade association GEODE and written by the Centre on Regulation in Europe (CERRE), shows that while many network operators and national regulators are taking steps in line with EU commitments on expanding the role for distribution network operation, there is little evidence that this has progressed very far in measurable terms, apart from in the UK.
As of this year, Energy Networks Association’s figures reveal that UK network operators are expecting around 3GW of flexibility services to be tendered, putting the UK considerably ahead of every other country in Europe.
Increasing take up by customers of electric vehicles and heat pumps along with an increase in flexible generation like battery storage will create more customers for flexibility markets and services, helping network operators to manage their systems more efficiently for customers while also delivering Net Zero emissions.
One of the projects highlighted in report for making good use of digitalisation and data to support long term planning was Energy Networks Association’s (ENA) Digital Systems Map. The unified map will show where electricity and gas network assets are and where distributed generation is located. This will show where network capacity exists to add distributed generation to the network or how EV charging points might be exploited to make use of existing network capacity.
The report also noted ENA’s Open Networks project; a major energy industry initiative that is shaping the way the UK’s electricity network operators deliver a smarter, more flexible grid. Open Networks and Britain's regulated innovation incentives have helped to drive such significant change that, as also highlighted in CERRE's report, the SP Group has ranked the UK’s electricity networks as the smartest in the world. The survey included 51 responses from network operators, trade associations and regulators covering 39 European countries.
Farina Farrier, Head of Open Networks at Energy Networks Association which represents the UK and Ireland’s energy networks businesses, said:
“There is no Net Zero without smart, flexible systems which is why we have worked closely with our members to develop our world-leading flexibility markets and the report is a welcome recognition of this achievement. Through our Open Networks project, electricity networks have been central to this transformation, laying the foundations for the UK’s decentralised, digitalised, Net Zero emissions future.”
Co-author of the report, Professor Michael Pollitt said:
“The CERRE report provides an important update on progress with the move to a more active Distribution System Operator across Europe. The report highlights differences and similarities in the perspectives of DSOs and national regulators and finds that UK Distribution Network Operators are at the forefront of the European energy network transition. However, that transition remains a work in progress.”
The Open Networks project has helped electricity network operators to respond quickly to the rapid growth of the low carbon transformation. Renewables’ share of total generation in the UK was at a record high level of over 40% in 2020, with over 30GW generation now connected to the local networks.
Notes to editors
Optimal regulation for European DSOs to 2025 and beyond, Centre on Regulation in Europe (April 2021)
Centre on Regulation in Europe (CERRE) promotes robust and consistent regulation in Europe’s network and digital industries. CERRE’s members are regulatory authorities and operators in those industries as well as universities.
GEODE: Founded in 1991 GEODE is made up of European independent distribution companies of gas and electricity. The association represents more than 1200 companies in 15 countries, both private & public owned. We serve a population of 100 million people.
Prof Michael Pollitt is one of the authors of the report. He is Professor of Business Economics at the Judge Business School, University of Cambridge. He is an Assistant Director of the Energy Policy Research Group (EPRG) and an Academic co-director of the Centre on Regulation in Europe (CERRE). Michael is a Fellow in Economics and Management at Sidney Sussex College, Cambridge. Michael was external economic advisor to Ofgem from 2007 to 2011. He has published 12 books and over 90 refereed journal articles on efficiency analysis, energy policy and business ethics. He is currently a Vice President of the International Association for Energy Economics (IAEE).
The Open Networks project brings together electricity transmission and distribution network companies with industry stakeholders, the Department for Business, Energy and Industrial Strategy (BEIS) and the energy regulator Ofgem, to lay the foundations for the smart grid in Great Britain and inform future developments Northern Ireland and the Republic of Ireland.
About Energy Networks Association
We’re the industry body for the energy networks. Our members own and operate the wires and pipes which carry electricity and gas into your community, supporting our economy. The wires and pipes are the arteries of our economy, delivering energy to over 30 million homes and businesses across the UK and Ireland. To do this safely and reliably, the businesses which run the networks employ 45,000 people and have spent and invested over £60 billion in the last eight years.