Ofgem and the Department for Business, Energy & Industrial Strategy (BEIS) release their initial response on the development of a smarter, more flexible energy system in the UK

28 July 2017

On 24th of July, Ofgem and the UK Government released their initial response to the November 2016 consultation, 'A smart, flexible energy system: call for evidence'.

The response includes the 'Smart Systems and Flexibility Plan', which sets out the Government's proposed approach for integrating flexible and smart technologies into the evolving UK energy system. It specifically outlines the role of energy storage in the UK electricity market, including Ofgem and Government's proposals to address policy and regulatory barriers that may prevent the further deployment of energy storage.

The response also directly addresses a number of other topics relevant to flexible and smart technologies including Demand Side Response, electric vehicles, smart technologies, the role of aggregators and government funding.

Joshua Partridge, Associate in Bird & Bird's Energy & Utilities Group says: "The UK Government and Ofgem's publications this week will reassure the UK energy storage industry that the Government and regulators recognise the concerns of industry and are looking to clarify and stimulate the role of storage in the UK energy market. The proposals also cover other forms of flexibility including smart technologies, DSR, and electric vehicles. However, we have seen the highest level of interest in storage over the past couple of years and it is also where a number of the more concrete proposals appear to be focused.

We will continue to follow market developments as the situation unfolds including in relation to National Grid's review of its ancillary services and Ofgem's review of grid charging. It is encouraging that the majority of the issues we highlighted in our papers last year were noted by government in the initial consultation or brought up by the industry in response and as a result are being addressed at present."

Following the publication of the 'Smart Systems and Flexibility Plan', the team at Bird & Bird will look to consolidate the regulatory and legal position for the storage industry in a paper once there is more clarity on the outcome of the various initiatives. This will be to follow up on the papers Bird & Bird released last year which primarily looked at the barriers to the deployment of storage which were then in place and how the industry can overcome these obstacles.