Government needs to enable flexibility for innovators to accelerate the shift to a net-zero electricity grid rather than be a hindrance, according to a new report by Energy Systems Catapult.
The study, called Rethinking Electricity Markets, calls for a new wave of reforms to create a zero carbon electricity grid and that the current system of policy makers “effectively choose which technologies to support”, stifles the potential of new ‘smart’ technologies.
Such a government-directed approach “risks making it more difficult and expensive for consumers and businesses to shift to green energy”, according to the Catapult.
The report calls for government policy to mandate clear outcomes for decarbonisation of the electricity grid and allow market forces to determine the best mix of generation, storage and smart technologies to achieve those outcomes. This would create a more innovative and consumer-focused energy system able to unleash innovation to accelerate a net zero economy, according to the study.
Amongst recommendations are an end to the Contracts of Difference and Capacity Market which inhibit flexibility and are biased to larger infrastructure, create more consumer-focused incentives, unlock the potential for flexibility and also digitisation,
Guy Newey, strategy and performance director at Energy Systems Catapult, said: “The current government-directed approach to energy is like Boris Johnson telling Steve Jobs how to design the iPhone. The progress on renewables over the past 10 years has been extraordinary, but if we are to finish the job of decarbonising the power sector – and create new businesses and jobs – we need to unleash the potential of our brilliant digital energy innovators to create a more flexible and greener system.
“History shows that consumers and markets are the key drivers of innovation – and crucially its widespread adoption. Government should step back from micro-managing the electricity mix and empower electricity consumers and markets to drive demand and shape investment for the biggest impact.
“Centralised contracts were the right approach for the last decade to get renewables where they are today and innovation support will always be needed for new technologies. Government now faces a strategic choice; does it want to make more and more decisions about what the future electricity market looks like? Or does it want to trust British innovators to deliver a net zero economy that works for consumers?”
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