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Smart technologies and data to future-proof UK energy

Unleashing the full potential of smart systems and flexibility in our energy sector could reduce the costs of managing the system by up to £10 billion a year by 2050, as well as generate up to 10,000 jobs.

Cutting-edge smart technologies will ensure the lights stay on and energy bills are cut, as demand for electricity intensifies and fossil fuels are phased out in the UK, in new plans laid out by the UK government and Ofgem today (Tuesday 20 July).

Smart and flexible energy systems will be needed if the UK is to meet its world-leading commitments to tackle climate change by 2050. Meeting an increasing demand for electricity, as fossil fuels are phased out, will require a system which ensures the supply of clean energy from renewable sources is guaranteed even when the wind is not blowing or the sun is not shining.

Published jointly by the government and Ofgem today, the Smart Systems and Flexibility Plan and Energy Digitalisation Strategy deliver on the commitments made by the government in the Energy White Paper and represents a significant step forward on the path to providing flexibility for our energy network.

Unleashing the full potential of smart systems and flexibility in our energy sector could reduce the costs of managing the system by up to £10 billion a year by 2050, as well as generate up to 10,000 jobs for system installers, electricians, data scientists and engineers.

A further 14,000 jobs could also be created by the export potential of these new technologies. For consumers, the benefits range from households being able to trade back their excess energy to reduce bills, through to knowing when the costs of running household appliances like washing machines and dishwashers are at their lowest.

Energy and Climate Change Minister, Anne-Marie Trevelyan, said:

“We need to ensure our energy system can cope with the demands of the future. Smart technologies will help us to tackle climate change while making sure that the lights stay on and bills stay low.

“The possibilities opened by a smart and flexible system are clear to see. They will not only allow households to take control of their energy use and save money but will ensure power is available when and where it’s needed while creating jobs and investment opportunities long into the future.”

Smart technologies and innovations will allow the energy system to cope with increased electricity demand from our homes and workspaces in the future. There is also significant potential to export these technologies abroad and help countries across the world to meet their climate change targets. Estimates suggest this export market could be worth as much as £2.7 billion a year to the UK economy by the middle of the century.

In a further move to help consumers take control of their energy use and reduce bills, the government has today published a call for evidence on the deployment of technologies that allow electric vehicles to export electricity from their batteries back on to the grid or to homes during times of higher demand. A separate call for evidence will look at enabling large-scale and long-duration electricity storage so that availability can be maintained during periods when renewables generate less energy.

Energy Minister Lord Callanan said:

“From looking at how something as simple as charging your electric car can cut your energy bill to making sure renewable energy can be stored for when it’s needed, this plan shows how we are using innovative technologies to meet our commitments on carbon emissions.

“Taking advantage of these smart technologies in our homes and businesses will not only help us tackle climate change, but will create thousands of jobs, unleash investment opportunities and cut costs as we build back greener from the pandemic.”

In the Smart Systems and Flexibility Plan, the government and Ofgem are driving forward plans for innovative new systems that could allow electricity generated by clean renewable sources to be stored at large scale and over longer periods, so it is ready to meet the challenges of energy system decarbonisation. Such technologies include pumped hydro storage, compressed air energy storage and the conversion of power to hydrogen so it can be used to generate electricity.

In addition, the plan looks at how electricity interconnectors with other countries can help balance the system and decarbonise at least cost.

Jonathan Brearley, chief executive of Ofgem, said:

“This plan is essential to hitting the UK’s net zero climate goal while keeping energy bills affordable for everyone. It requires a revolution in how and when we use electricity and will allow millions of electric cars, smart appliances and other new green technologies to digitally connect to the energy system.

“As energy regulator, Ofgem will work with government and industry, to help consumers make the changes needed and ensure the transition to net zero is affordable, fair and inclusive for all.”

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