Government must accelerate smart grid rollout, say MPs

The government must provide better strategic leadership to encourage the rollout of smart grid technologies in the UK, according to a critical new report from the cross-party energy and climate change committee MPs, which recommends an urgent upgrade of the UK's transmission network.

Paddy Tipping MP, who sits on the committee, said the existing grid had been developed to serve an outdated fossil fuel economy. "The future looks very different," he said. "By 2020 the UK electricity network will need to accommodate a far more diverse energy mix that includes a much higher proportion of renewables that cannot respond so easily to fluctuating demand."

The report concluded that new smart grid technologies would allow supply and demand to be balanced more efficiently and ensure greater decentralised generation of electricity from household and community renewables.

But MPs warned that the rollout of such technologies was being delayed by the combination of skills shortages and a conservative culture within the electricity network sector that has failed to foster technology innovations.

The committee also raised concerns that industry watchdog Ofgem has granted funding for new grid investment projects ahead of the completion of a fundamental review of how better use can be made of the existing network capacity.

Although the report acknowledges that investment in new transmission capacity will be required to avoid delays in connecting new power stations, it argues that the existing regulatory framework is failing to encourage new technologies, such as demand management systems designed to help reduce peak loads that could limit the need for additional transmission capacity.

Currently, 60GW of electricity generation capacity is stuck at the planning stage because of the industry's failure to agree on the regulatory regime for connecting new power sources to the grid.

Wind developers argue that the current system, where enough connection requests must be made in a certain area to justify upgrades to the grid, is weighted in favour of large-scale power plants, while reforming the connection process is a vital part of the National Grid's and Ofgem's plans to get more renewables on stream, as outlined in the Transmission Access Review.

But traditional energy firms have not co-operated with the proposals, leading to a stand off over how grid connections should be negotiated.

The report urges the Department of Energy and Climate Change to move quickly to force energy firms to accept a new regime for connection.

A DECC spokesperson said: "We welcome the select committee's report and look forward to fully digesting and responding to the select committee's recommendations."