Memorandum 28
Submission by the Energy Networks Association
(ENA)
INTRODUCTION
1. ENA is the industry body for the licensed
electricity and gas transmission and distribution companies in
the UK, and we welcome the opportunity to provide our views.
2. It would not be appropriate for us to
comment on the feasibility, costs, timescales and progress in
commercialising renewable technologies and we will limit our response
to consideration of the technical development of the networks
required to facilitate increased volumes of renewable energy-generation.
TECHNICAL AND
PRACTICAL CONSIDERATIONS
FOR NETWORKS
3. New forms of Renewable energy-generation
will bring a range of challenges for networks, including a need
to address stability, intermittency, security and plant margin
issues. At distribution level there will be an impact on how networks
have to be designed and operated, potentially transforming them
from largely "passively" managed to more "actively"
managed systems. The ENA recognises that this is technically possible
but the changes will require time to be fully researched, prove
reliability in the field and then to build into the networks.
There will also be a concomitant requirement for investment.
4. Increasing deployment of decentralised
energy systems will also have a profound impact on the whole of
the network system and will present integration and management
challenges.
REGULATORY FRAMEWORK
5. The regulatory framework for the energy
network companies will need to be adapted to accommodate the technological
developments outlined above. The existing regime has been successful
in removing inefficiencies, resulting in network charges to customers
falling by 50% in real terms since 1990. Additional elements have
been added to the simple RPI-X model to incentivise reductions
in losses, improve quality of supply, and support for distributed
generation and network innovation. However, it will be necessary
to consider whether the current framework of incentives gives
sufficient weight to long-term considerations of the environment
and network development. If not, can it be adapted to accommodate
them or do we need a different, more strategic approach to deliver
the kind of networks which will be required in response to the
long term needs of customers?
6. The implications for the networks of
the proposals for the so called "eco towns" will require
a co-ordinated approach to planning and regulation which properly
incentivises network development and removes barriers to its speedy
implementation.
FALLING ASSETS
AND SKILLS
BASE
7. The bulk of the existing electricity
transmission and distribution system was built in the 1950s to
meet the needs of a very different electricity generation paradigm.
Principal asset lives are typically 50 years and so the current
infrastructure will increasingly need replacement. If it is to
be effectively adapted to meet the needs of renewable energy-generation
technologies then decisions on deployment need to be made soon.
8. A considerable deficit is developing
in engineering skills, which may constrain the ability to build
and operate the networks of the future. We welcome the Government's
increased emphasis on skills development.
SUMMARY
9. Successful deployment of generation by
whatever technology is tied inextricably to parallel developments
in networks. We are concerned that energy policy and how this
is reflected in the regulatory regime for networks does not adequately
deal with the need to synchronise developments in generation and
infrastructure.
10. We would welcome the opportunity to
take questions either in person or by correspondence to assist
the Committee in its deliberations.
July 2007
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