Security of supply should be banned term, says ex-MP
Sector's favourite "catch-phrase" should be replaced with policies which recognise system and service risks, says Laura Sandys
Former conservative MP Laura Sandys has called for the use of the term “security of supply” to be “banned” in industry and policy circles.
Writing for Utility Week, Sandys, who is now chief executive of consultancy firm Challenging Ideas and also sits on the advisory panel for the cost of energy review being led by Professor Dieter Helm, said the term lacks nuance and is misleading.
Sandys said that security of supply was a “catch-all phrase” which fails to distinguish between service risks and system risks. She also said that policy makers have become fixated on providing "a 100 per cent energy service at any time and to all consumers” but are blinkered in their view of how to deliver this, only taking into account the availability of centralised generation capacity.
“To a much lesser extent, does policy take into account energy supply that is not on the system,” wrote Sandys. “Nor does it anticipate the technological interventions that could help us deliver that 100 per cent service without drawing all of this from centralised generation.
“With distributed energy, grid storage, prosumers, industrial demand and storage beyond the plug, new options for responding to service shortfalls are increasingly available and should be encouraged."
Sandys suggested that, in future, consumers might contract with their suppliers to be guaranteed just 80 per cent “system service” while securing the remaining 20 per cent from distributed energy resources such as electric vehicles and municiple or in-home energy storage facilities. This would remove the pressure for 100 per cent energy service from the “security of supply paradigm” she said.
Sandys also criticised the use of derated reserve margins as a means for assessing the criticality of energy supply security.
Pointing to a paper published by Edmund Reid, an analyst at Lazarus Group, Sandys said the measure is “old-fashioned and data poor”. She also referenced an International Energy Agency critique which said the reserve margin metric “is not well suited to taking into account the capacity of variable renewable energy”.
Sandys said European regulators now view the use of reserve margin information as a “fear policy”. She insisted “security of supply as a term should be banned” in favour of policies which “distinguish between service risk and system risk, whose different characteristics and needs, are conveniently disguised by our sector’s favourite catch-phrase".