Source · Select Committees · Business and Trade Committee
Recommendation 39
39
Deferred
Paragraph: 178
Accelerate finalisation of National Policy Statements for Energy and align with future delivery plan
Recommendation
In December 2020, the Government confirmed that the National Policy Statements for Energy, which were published in 2011, would need to be updated to reflect our transition away from fossil fuels and towards cleaner, greener sources of energy. We are disappointed that now, in 2023, the Government has not yet finalised these statements. The Government is consulting on material changes to the statements which reflect recent shifts in Government policy. These changes will also be subject to parliamentary scrutiny. Due to the delay in revising these statements, we urge the Government to make sure the remaining work is delivered at pace. In future, revisions to the NPS should take place in conjunction with changes to the Government’s forthcoming delivery plan, so that the two remain aligned.
Government Response Summary
The Electricity System Operator (ESO) and Ofgem's response describes the Demand Flexibility Service, its success during Winter 22/23, and ongoing evaluations for potential future rollout, entirely failing to address the committee's recommendation regarding the delayed finalisation and future alignment of National Policy Statements for Energy.
Paragraph Reference:
178
Government Response
Deferred
HM Government
Deferred
122. [Response provided by ESO] Across Winter 22/23, 1.6 million households and businesses signed up to participate in 22 service events across the winter, covering both live events to balance Great Britain’s electricity network and monthly test events to deliver savings for consumers, demonstrating interest and enthusiasm for consumer flexibility on a scale not previously seen in the UK. 123. Introduced as an enhanced action to support operation of the network during Winter 22/23, the Demand Flexibility Service was used twice for live events in January 2023 to support the management of the electricity system. While the ESO’s day to day operational tools allowed it to operate the network as normal without the active use of the Demand Flexibility Service to manage margins, this service demonstrated the level of interest and engagement in consumer flexibility. 124. The national smart meter network, operated by the Data Communications Company (DCC), also played an important role in facilitating greater consumer participation, helping to connect consumers to a new range of smart applications used by providers for this service. 125. The ESO is undertaking a holistic review of the Demand Flexibility Service alongside industry participants and consumers to assess how the service could be improved in future. The outcomes of this review will be published later this summer, and will inform decision making around the future evolution of the Demand Flexibility Service. 126. [Response provided by Ofgem] ESO is gathering data and evaluating the Demand Flexibility Service, including through the appointment of the Centre for Sustainable Energy and Element Energy, to lead an innovation project exploring the customer experience of participating in the service. 127. Ofgem considers it is important to try to make demand flexibility both universal and automatic, so that consumers do not have to put in as much manual effort to participate and/or benefit from flexing their demand. 128. Ofgem will support the ESO’s evaluation activities as it reviews the service for a potential further rollout for winter 2023/24 and stands ready to act when necessary. 26 Decarbonisation of the power sector: Government Response