University of Exeter Energy Policy Group response to ECCC call for evidence on electricity demand-side measures
Submitted by (alphabetically): Richard Hoggett, Matthew Lockwood, Catherine Mitchell and Tom Steward – Energy Policy Group, University of Exeter.
9th July 2014
We welcome the opportunity to submit evidence to the inquiry. As the inquiry particulars set out, reduction in demand can be temporary (known as demand-side response (DSR)) or permanent (known as electricity demand reduction (EDR). We use this nomenclature throughout this response.
We have primarily directed our responses to three main questions set out in the terms of reference.
Overall, our view is that the combination of the demand side measures put together and/or executed by the Government and Ofgem did not place enough attention on (i) design which should have led to successful implementation of policies; (ii) the flexibility needs of an electricity system with a high proportion of variable power (which whilst not the situation now should become so by 2020); and (iii) the need for complementarity with wider energy policy goals.
We see the demand side as being important for two main reasons:
- Firstly, an energy system transformation based on selling will be (i) much more expensive to transform to the system level rather than one which uses energy as efficiently as possible; (ii) much less desirable from a resource perspective (i.e. much more resource is needed to make that system); and (iii) much more expensive at the household bill level. Arguably, a central focus of Energy Policy should be on helping customers to consume less.
- Secondly, it is becoming clear within electricity systems that increasing levels of variable power, while reducing carbon, also lead to a number of challenges related to system operation; profitability for fossil generators; potential investment concerns for fossil fuel plants (and therefore a dimension of ensuring security of supply); and the need for more flexible demand.
In both cases, the demand side is a vital, economic dimension of an efficient, affordable future energy system. However, there are minimal incentives to reduce energy relative to supplying it or to make it more flexible (Mitchell 2014).
You can read the full response here: Elec Demand Side Measures – UoE Energy Policy Group