Green groups welcome Tory plans to smarten up "dumb" grid

Green groups and the energy industry today offered a cautious welcome to the Conservative's ambitious new plans for a major overhaul of the UK's energy grid as part of a wide-ranging, multi-billion pound energy efficiency programme.

Speaking earlier today at the launch of the Conservative's new green policy strategy, party leader David Cameron said the construction of a new £1bn smart grid would sit at the heart of the party's plans to transition the UK to a low-carbon economy.

"We currently have a dumb 1960s grid and moving to a smart interactive one will help us create a decentralised energy revolution," he said, adding that smart grid technologies capable of automatically managing the flow of power round the grid would provide a major boost to adoption of renewable energy systems and electric cars.

The plan to upgrade the grid to allow energy firms to automatically turn off non-essential appliances, such as washing machines and other white goods to cut peak loads, also features "feed-in tariffs" to incentivise local electricity generation and would establish a national recharging network for electric cars.

The government has already mandated a smart meter rollout as well as feed-in tariffs, but has not yet put forward any smart grid plans.

The Conservative scheme is effectively a wholesale adoption of what smart grid evangelists have been advocating for some time and secured praise from both green groups and the Energy Retail Association, which represents the "big six" power companies and said it welcomed the proposals "wholeheartedly".

Cameron said that as well as upgrading the grid the Conservatives would introduce a new green loan scheme entitling every household to be fitted with up to £6,500 of energy efficiency equipment, including smart meters, with the cost then repaid through lower fuel bills over a period of up to 25 years.

The plan also envisages expanding the amount of offshore wind and marine power by encouraging the National Grid to construct a new network of undersea Direct Current (DC) cables by re-jigging the Renewables Obligation to include the connections in the incentive scheme.

The National Grid declined to comment on the practicality of retooling the entire grid, the accuracy of the Conservative's £1bn cost projection, or whether it could bear the cost of constructing the undersea DC cable network.

However, the company said in a statement that it welcomed the Conservative proposals in principle. "Security of supply and climate change go hand-in-hand, so we are committed to looking at innovative ways of managing the national grid network such as smart grids, smart metering and dynamic demand (where fridges and other appliances can help balance supply and demand)," it said.

In addition to the grid upgrade and energy efficiency programme, the Conservatives are proposing a raft of measures to curb carbon emissions, including plans for 5,000MW of new coal-fired power plants to be equipped with carbon capture and storage equipment, binding sustainability rules for biofuels, and the establishment of a nuclear waste site to support plans for a new generation of reactors.

The new strategy also features plans to bolster renewables capacity, including measures to incentivise the wider use of biogas produced from the anaerobic digestion of farm and food wastes, create a network of large-scale Marine Energy Parks, and make it easier for local councils to build Combined Heat and Power district heating networks.

However, it is likely that the government's current planning bill would already facilitate construction of large-scale Marine Energy Parks by the time the Conservatives could gain power.

The report also reiterated the Conservative's high-profile commitment to build a new high-speed rail network linking London to Birmingham, Manchester and Leeds, while scrapping plans for a third runway at Heathrow.

The ambitious decentralised approach was welcomed by NGOs and campaign groups.

David Nussbaum, chief executive of WWF-UK said the report showed that the Conservatives recognised the fact "that the drive towards a low-carbon economy will be positive – not just for the environment, but for jobs and growth".

His comments where echoed by Tom Delay, chief executive of the Carbon Trust, who said the paper "makes a powerful case for the low-carbon economy", adding that the government-backed body would now work with the Tories on the consultation process that will now follow the release of the report.

"We look forward to contributing to the consultation and will be making suggestions as to how business energy efficiency can be dramatically improved and how the UK can harness private sector investment to become a world leader in low-carbon technology," he said.