Women moving around her kitchen.

The smart grid is the future of energy: let’s make sure we deliver

Jul 26, 2017 - 4min read



We welcome the announcement by the Government this week that they will shake up the energy industry and, in Ofgem’s words, ‘unlock a smart energy system that is fit for the future.’

They are absolutely right: the current system was built in a different time, for different types of energy generation (coal primarily) to serve the different needs of customers. This system simply cannot cope with modern+ and intermittent types of generation that are now integral to our world. Being able to charge your car from the wind blowing in Teeside just wasn’t a requirement in the 70s.

While we wait for more concrete examples of how the government plans to enact these changes, one notable promise is the investment of £246m into funding battery research. It’s no secret, to us at least, that this will be key to making energy cheap and plentiful.

OFGEM quote by Chris Russell

The government’s ultimate goal is to save UK bill payers up to £40 billion by 2050. A plan mirroring our own ambition to halve our customers’ energy bills by 2022.

These are some pretty big numbers being knocked around – and it’s no simple promise. The energy industry is complicated and it has a number of issues.

The electricity grid and gas networks need to be balanced in more or less real time, therefore matching supply to demand. National Grid is responsible for this and incentivises suppliers, generators and end consumers to support them in their task. Just how well this balancing is done has a direct impact on market prices.

Typically when demand is high, the price is high – as the supply becomes tighter. When millions of people turn on their kettle during half time in the FA Cup final for example, the strain put on the system is very high and electricity becomes a premium. In turn these costs to keep the supply and demand matched mean higher bills to you and I.

OFGEM quote

Fundamentally, keeping this volatility under control costs money, and in many respects is wasteful. Think of it like train travel, if you can travel off peak then it’s cheaper for you, and if you travel at peak then at least try and book a seat in advance!

This is where home battery storage solutions come into play. What if you could smooth the peaks and troughs out – thus lowering the overall cost of the energy in the first place? You could boil your kettle at half time using the energy you stored 3 hours earlier, and at a much lower price at that. What’s more, we could do that on your behalf so you don’t need to think about it.

Even better, if you had your own solar panels and a home battery connected to a smart meter, then you could store your own renewable energy for use at peak times, or sell any of that excess electricity back to the grid. A double win.

As part of the £246m earmarked for battery research, the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, has set aside £45m for a competition to make batteries more accessible and affordable. This is good news – and marks a step forward in the UK’s thinking in this space.

Chris Russell, our MD, says, “We are glad the government is recognising the change that needs to be made in the energy industry. It is a positive and timely statement of intent.

 

“The faster it happens, the more quickly consumers will save on bills, the more innovative the system and the greater the stimulus to the UK economy. We urge the government to be bold and make the progress that we at Tonik Energy have been wanting to see for some time.

“Ultimately, the benefits of this levelisation and overall reduction in cost must be passed on to customers who are enabling this shift to take place. Innovative organisations will have an enabling role to play for sure, however that role is also not to swallow up savings that should otherwise make it back to bill payers.”

Chris says, “In order to deter this form of profiteering, and to incentivise the customer to make further savings, we have clearly and transparently set out our pledge to halve your energy bills by 2022, and explained how we aim to do this.”

Ofgem and the government recognise that it is time for far more tech-savvy suppliers such as Tonik to play a bigger part in the wider energy system – and this is just as positive for the consumer as it is for us.

Andrew Burgess, an associate partner at Ofgem says, “For individual consumers, I think the opportunities are for businesses coming in, for the Amazons and Netflixes of the world coming into a traditional sector and offering different ways for consumers to engage.”

As a supplier who has always seen a more engaged relationship with our members as key to drastically cutting their energy bills, we welcome the Government’s announcement and look forward to being part of the journey to deliver more affordable, renewable energy to our members.

Got solar panels already?  Register your interest here for our battery storage trial with Powervault.  We’ll contact you to tell you how with a Powervault and our smart tariff you can save further on your energy bills.

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