UK needs regulatory changes amid energy industry revolution

London (Platts)--27 Apr 2018 538 am EDT/938 GMT

The UK's energy landscape is on the brink of a radical change as growing adoption of electric vehicles and a decarbonization of heating sector call for changes to the current regulatory framework and a shift from the traditional supplier hub model, a London conference heard Thursday.

  • Electric vehicles, heat lead energy market shift
  • Framework needed for markets to work efficiently
  • Innovation brings changes to current supplier model

A "change in regulation" is necessary as new innovation and business models begin to play a part in building a new energy future, energy regulator Ofgem CEO Dermot Nolan said at the Westminster Energy, Environment & Transport forum.

National Grid's Acting Director of Operations Duncan Burt said the new frameworks and a better understanding of energy future is needed. EV adoption and heat sectors are "significant demand areas", which could make the demand curve "higher, steeper and peakier" if frameworks aren't put in place.

National Grid's Future Energy Scenarios, published in July 2017, expects EVs to represent 90% of all cars by 2050, with potential to boost peak demand by over 6 GW by 2035 and 18 GW by 2050 under its Consumer Power Scenario.

Without smart charging technology, the Grid predicts 2030 peak demand relating to EVs to be as high as 8 GW.

Ofgem's Nolan also warned that the industry needs to ensure "costs are not disproportionately" paid by vulnerable consumers due to burgeoning electric vehicle growth.

As more electric vehicles become "common" in a future energy scenario, they are likely to benefit the grid by providing flexibility, he added.

With the energy industry seeing a systemic shift towards decentralized power generation, smart meters and grids, the existing supplier model is changing, Nolan, and other panelists including Steph Hurst in the UK energy department said.

Adoption of a new energy world could mean a "tear up in the supplier license" as it exists now, Nolan said, but adding that it isn't a "trivial" move as it requires regulatory changes.

--Anuradha Ramanathan,

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