The government said it welcomed the recently published report by the National Infrastructure Commission (NIC) – Smart Power – as an “opportunity to transform the future of the UK’s electricity sector”.
The report suggested a future UK energy system principally built on storage, DSR and interconnectors could save consumers up to £8 billion a year by 2030 and help the UK meet its 2050 carbon targets.
In the Budget 2016 policy paper, the government confirmed it will implement the commission’s recommendations, and work with Ofgem to remove regulatory and policy barriers, “positioning the UK to become a world leader in flexibility and smart technologies, including electricity storage”.
It also said Ofgem will consult later this year on the future of the £100 million Network Innovation Competition to maximise the delivery of genuinely innovative projects and technologies.
Also in the policy paper, the government confirmed support for interconnection, saying it “recognises the important contribution interconnection can make to the future energy mix”.
“There is a strong pipeline of projects in development, and the government supports the market delivery of at least 9GW of additional interconnection capacity – an 80 per cent increase on previous estimates,” it added.
The Treasury also confirmed support for small modular reactors, with at least £30 million allocated to an SMR-enabling advanced manufacturing research and development programme to develop nuclear skills capacity.
On shale gas exploration, little was said other than that the government will consult later this year on the priorities and delivery models for the Shale Wealth Fund, and how it can be deployed in local communities and the North as a whole.
The government said the Shale Wealth Fund could be worth up to £1 billion over 25 years and will provide additional funds over and above industry schemes and other sources of government funding.