NazmiyeOzkanI was invited to attend a panel discussion at a fringe event organised by the New Statesman magazine and supported by the Energy Networks Association at the recent Labour Party Conference.

Titled ‘Smart Grids: Is this the way of selling low carbon policy to sceptics?’, the event was chaired by Jon Bernstein, former deputy editor and digital director of the New Statesman, and the panelists included Tom Greatrex MP, Shadow Minister of State, Department of Energy and Climate Change, Jason Kitcat of the Green Party, Leader of Brighton and Hove Council, Basil Scarsella, CEO of UK Power Networks and myself.

Basil began by discussing how distribution costs make up just a small part of consumer energy bills, only about 16%. He highlighted how smart grids might help us meet security of supply, affordability and sustainability objectives. Jason elaborated on how smart grid 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 man-made 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. Whilst 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 stops 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 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.

Dr. Nazmiye Ozkan and Tom Watson work at the Policy Studies Institute, University of Westminster. Both are currently working on the UK Energy Research Centre (UKERC) project: Scenarios for the Development of Smart Grids in the UK

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