Scottish and Southern Electricity Networks (SSEN) has urged the government to encourage households and small businesses to participate in flexibility markets by offering them “interim incentives… beyond the current market value”.
In a new report setting out its progress towards the adoption of a distribution system operator (DSO) model, the company says there is “a gap between government aspirations for flexibility and the level of engagement from households, businesses and communities.”
“The government could help close this gap by incentivising participation in flexibility markets and seeking to promote and educate the public about the changing nature of the energy system,” it proposes.
“The government should launch a consultation into how this programme can be most effective and should combine behavioural nudges and financial rewards.”
The report lists a series of regulatory and policy changes which the company believes will help the UK meet its climate change commitments.
It warns that network reinforcements to accommodate the uptake of electric vehicles (EVs) can take up to five years to deliver and calls for a “clear mechanism for anticipatory investment” to address the risk of assets being stranded.
It says all new homes should be “ready” for EV charging and heat electrification, as should new network infrastructure: “The most cost-effective time to upgrade a network is when is being built. EV chargers should be mandated to be smart.”
The report says networks operators should be given wider access to anonymised data on the uptake of low-carbon technologies and the use of EVs. And it calls for stronger coordination of planning between government departments and local authorities, noting the potential knock-on effects of their actions.
“Climate change is, rightly, now a first order issue and the adoption of net zero targets in the UK and Scotland, while ambitious, are absolutely necessary and absolutely achievable,” said Andrew Roper, director of DSO at SSEN.
“As a network operator we have a key role in realising this aim and are making good progress in our transition to become a distribution system operator with projects like LEO (Local Energy Oxfordshire) and Transition providing real-life demonstrations of the local, low-carbon networks of the future.
“This action from industry needs to be matched with a supportive and flexible policy environment. We believe the seven policy recommendations we have identified will not only help us on our transition, but also create a foundation for delivery of net zero within the electricity system.”