Emory International Law Review

Regulation and innovative finance for sustainable energy
Rafael Leal-Arcas,
Michalis Kanakakis,
George Thanos,
Gemma Fearnley *Rafael Leal-Arcas is Jean Monnet Chaired Professor in EU International Economic Law and Professor of Law, Queen Mary University of London (Centre for Commercial Law Studies), United Kingdom. Visiting Researcher, Yale Law School. Visiting Professor, Sorbonne University Abu Dhabi (United Arab Emirates). Member, Madrid Bar; European University Institute, Ph.D.; European University Institute, M.Res.; Stanford Law School, J.S.M.; Columbia Law School, LL.M.; London School of Economics and Political Science, M.Phil.; Granada University, J.D.; Granada University, B.A. The financial help from the European Union (EU) for the writing of this Article is gratefully acknowledged as part of the WiseGRID project (grant agreement number 731205), funded by the EU’s Horizon 2020 research and innovation program. This Article has also been written with the financial support of the Erasmus+ Program of the EU, which funded my Jean Monnet Chair in EU International Economic Law (project number 575061-EPP-1-2016-1-UK-EPPJMO-CHAIR). Email: r.leal-arcas@qmul.ac.uk.Michalis Kanakakis is at the Athens University of Economics and Business. Contact: kanakakis@aueb.gr.George Thanos is at the Athens University of Economics and Business. Contact: gthanos@aueb.gr.Gemma Fearnley is a Researcher, WiseGRID project, Queen Mary University of London; Lawyer, The Government Legal Department (Government of the United Kingdom); Solicitor qualified in Scotland; LL.M, Centre for Commercial Law Studies, Queen Mary University of London; Dip.LP, The University of Glasgow; LL.B, The University of Glasgow. Contact: gemmakf@gmail.com. The research assistance of Juan Rios is acknowledged.

Abstract

Achieving greater renewable energy usage, energy efficiency, and energy security are practically universal goals today. Key emerging trends to this effect include the promotion of electric vehicles, deployment of smart grids and smart meters, as well as technology and regulation to encourage storage and demand response mechanisms. Overall, there is a move towards greater flexibility, with consumers having more control over their electricity usage and costs. This Article introduces business models to illustrate the roles of multiple actors in a decentralized smart grid system. It identifies interactions between the various players, the tools they will manage, the added value in using the functionalities of such a system, and ways to maximize profits for those involved. The Article also examines the United Kingdom (UK) as a case study. It explores where the UK stands in terms of introducing tools and technologies for decentralization, including electric vehicles, smart grids, and demand response mechanisms. It also examines regulation in the UK to assess how conducive it is for decentralized energy. In addition, the Article identifies specific concerns related to data protection stemming from smart metering and analyses relevant regulation in this regard.

Introduction and Methodology

In this Article, we introduce a set of archetype business models (BMs), aiming to illustrate the roles of the multiple actors in the decentralized smart grid and identify the composite services that may be realized from their interactions. In this context, each business model focuses on the commercial exploitation of a set of tools that each involved actor manages and investigates the added value to be provided by the joint utilization of the functionalities. The objectives are economically oriented, in the sense that they target to maximize the potential profits for the participating actors.

The BMs are characterized as “archetype,” because they aim to account for the entire set of services in which each tool may play a role. The archetype BMs can be used and tailored by adopters of Smart Grid solutions (tools, applications and services) in order to better exploit the added value from their offerings and reinforce their market impact.

In our methodology, the archetype BMs are presented graphically using value networks and business modeling canvas that describe the assets/products/tools (using as an example/use case the EU WiseGRID project, 1 WiseGRID is a research project (number 731205) funded by the EU’s Horizon 2020 research and innovation program. Professor Dr. Rafael Leal-Arcas is one of the Principal Investigators. See generally Wisegrid, www.wisegrid.eu (last visited Feb. 11, 2020). as discussed in Section II.2) to be utilized for achieving the objectives and the anticipated economic gains for each core participating actor. As it will become apparent, the Smart Grid tools are designed to meet this target by achieving the optimal utilization of the existing generation resources, suggesting the least costly consumption schedules and contributing to the smooth integration of innovative technologies and mechanisms (EVs, batteries, demand response (DR)) in the smart grid. Moreover, a crucial part of our methodology is the generation of a generic value network for Smart Grids that is used as a basis for the analysis of the separate archetype BMs. This generic value network is presented in Section II.1 and can be used from the energy community stakeholders as a template for business models in the Smart Grid environment. Such generic networks are currently missing from the existing literature.

The analysis attributes great importance in defining the gains provided by each individual tool for each specific actor who participates in the value network. This process firstly requires determining their ownership, i.e., which actor bears their development and operational cost (or pays the relevant license to a third party) and receives the revenues from their management. In most of the cases, each involved actor manages a single tool. This approach is followed in order to demonstrate the highest possible granularity of the value networks and investigate if such conditions allow for lucrative business models to appear. We mention beforehand that this approach may be extended to capture hybrid cases, when one actor undertakes multiple roles and consequently bears the cost and gains the profits related to the management of more than one tool.

Focus is given to the commercial exploitation tools whose sophistication provides the optimal local consumption and production schedules at the prosumers’ premises. According to the basic business model, these tools are managed by an energy service company (ESCO), which elaborates the necessary data and provides the optimal suggestions to the prosumers. The ESCO receives as payment a portion of the prosumer’s savings due to the decreased electricity bill or a part of their compensation (provided by other actors, e.g. the virtual power plant (VPP) Operator) for their participation in the considered services (e.g. an explicit DR event). This form of revenues is aligned with the report of the European Commission, 2The European Commission’s Science and Knowledge Service, Eur. Comm’n: EU Sci Hub, https://ec.europa.eu/jrc/en/energy-efficiency/eed-support/energy-service-companies (last updated Nov. 14, 2016). which suggests the Energy Performance Contacting (EPC) as the financial model between the ESCOs and the prosumers. Essentially, the EPC model implies that “remuneration of the ESCO is directly tied to the energy savings achieved,” and thus transfers the risk of the investment to the ESCO and encourages the market competitions between such companies. In the following sections, we describe the potential risks that may arise from these forms of revenue, which make the engagement of the ESCO questionable and propose further candidate revenue schemes aiming to prevent a possible market failure. A similar rationale is also followed for the actor(s) who should bear the capex cost of the innovative technology (such as the charging stations) because this factor may be beneficial for multiple participants in the value network.

For all the BMs, our analysis provides preliminary insight into the state of the grid in the absence of these tools and the innovative technology, and consequently the actors’ increased costs or the limited revenue due to the lack of their sophistication and the advances capabilities that they respectively provide. This process is a prerequisite for identifying the “business as usual case,” which is commonly considered the comparison benchmark for identifying the source of the added value and quantify the potential benefits for the actors. Finally, the following Sections document the technical, regulatory, and behavioral barriers that may prevent the realization of such BMs and question the lucrative exploitation of the involved tools in the market and sketch the roadmap for the mitigation of this risk.

Finally, it is mentioned that the complex environment of the smart grid with multiple interacting actors, allows to potentially design additional and more complicated scenarios than those described. Some of these possible alternatives are documented in the following sections, along with the basic scenario that is considered. We emphasize that our novel methodology is suitable for capturing such extensions and the value network graphs may be appropriately modified to depict the flows of money and information that correspond to each case.

After this Introduction, this Article provides in Section II an analysis of decentralized energy by examining the various archetype business models and barriers. Section III then analyzes the example of the United Kingdom as a case study. Section IV concludes.

I. Decentralized Energy: Archetype Business Models and Barriers

A. A Generic Value Network for Smart Grids

Figure 1 presents a generic value network for Smart Grids. It depicts ten key business roles and their interactions in terms of power, information, and money flows. This generic value network does not aim to represent all the business roles and all the possible interactions between the various stakeholders, as this is not possible due to the composite and rapidly evolving nature of the Smart Grids. However, it represents a vast number of scenarios and the most important players. Its purpose is to serve as a guideline/template for creating and analyzing various business cases and scenarios toward a decentralized Smart Grid.

 

Figure 1: The Archetype Value Network for Smart Grids

Insert fig1

In its current form, the generic value network includes the following “core” business roles:

  • Power Production that is responsible for the power generation, using either fossil fuels or Renewable Energy Sources (RES). This role may include multiple actors independently of their size, i.e. from large power plants to small residential prosumers.

  • The Power Transmission grid is operated by the Transmission System Operator (TSO)s and provides High-Voltage transmission from the generation units and interconnection services between the distribution grids. The TSO is responsible for the maintenance of the transmission system and must also take the necessary actions (capacity development) to guarantee its ability to satisfy the evolving demand.

  • The Power Distribution grid is operated by the Distribution System Operators (DSO). It is connected with the transmission grid and provides Low (or Medium) Voltage power to end users. The DSO is responsible for operating the transmission system and planning the necessary capacity expansion adequate enough to satisfy the future demand. His role is also crucial for the incorporation of distributed generators in the smart grid.

  • The Wholesale Market Operation combines the information of the production cost and demand forecasting to compute the wholesale prices and propagate them to the generators, the retailers, and the aggregators.

  • The Power Retailers perform the final sale of power to end users. These agents try to forecast in accuracy the future demand and reserve the adequate amount in the wholesale market, which they resell to their customers.

  • The Balance Services, provided by the Balancing Responsible Party, who operates as an intermediator between the Wholesale Market and the Retailers. This agent is responsible to guarantee that the quantity reserved by the retailers is actually consumed.

  • The Aggregators offer intermediate services between the end users and the other participants in the Smart Grid. They are responsible for designing and providing the sophistication for the orchestration of multiple appliances, such that their collective consumption scheduling results in benefits to their owners and a remarkable positive effect for the grid. The appliances may belong to multiple individual users with personal interests or to a single entity (for instance a fleet of EVs).

  • The Energy Efficiency and Management Services role may be undertaken by the relevant companies or organizations, such as the EV Fleet manager, the Battery Operator, the ESCBOs, and Renewable Energy Service Companies (RESCOs). These agents operate as intermediators between the aggregator and the end-users and offer the necessary equipment (e.g., Electric Vehicle Supply Equipment (EVSE), smart meter, Building Management Systems (BMS) and automated operations (e.g. Enterprise Resource Planning (ERP)), which allow a consumption schedule to be realized (e.g. Automated DR event).

  • Power Consumption refers to all electrical appliances that consume power for their real time operation. As it becomes apparent below, we choose to distinguish between power consumption and energy storage, because the latter term refers to appliances (batteries), which consume power for supplying energy for other devices or inserting it to the grid.

  • The Energy Storage refers to the means which capture/store the produced electricity for some future use. We choose to assign a separate role for energy storage even though it could be also represented as a combination of consumption and production. This is because batteries do not literally produce new power but may inject the previously consumed power in the grid, aiming to smooth out the negative impact of peak loads.

The actors may undertake a single business role or a combination of multiple such activities in the market. For instance, an end-user is a consumer when relying on the grid for the operation of its appliances and becomes a provider when offering electricity to the grid for the harmonization of the demand. In this latter case, this agent is considered as a prosumer, a term that may refer to multiple business scenarios. More specifically:

Additionally, more actors may arise by the combination of the basic roles. For example, a retailer may decide to build its own generation plant, aiming to reduce its dependency from the fluctuating prices in the wholesale market and the consequent risks. In this scenario the resulting role is referred as a pretailer. Additionally, a retailer may decide to undertake aggregation services, aiming to take advantage of the existing customer basis.

Figure 1 does not include a role for the regulator, because this agent does not offer a distinct contribution to the composition of a service, but is instead responsible for the supervision of the whole system—to guarantee the “level playing field,” i.e. that all actors are imposed the same set of rules and have access to equal volume of information. The impact of this role may be implicitly included in a Business Model Canvas, by means of the entrance barriers due to the regulatory framework in the considered market. In the analysis of the archetype business models in the next section, we use this business modeling canvas approach to illustrate the main components of the business models.

B. The EU Paradigm—EU Project WiseGRID

In order to apply our methodology for business modeling analysis and generate a number of archetype business models for decentralized energy and Smart Grids, we exploited as a paradigm the EU research and innovation project WiseGRID. 3See generally WiseGrid, supra note 1. WiseGRID, running from November 1, 2016, to April 30, 2020, is one of the largest, in terms of funding—with a total cost more than 17 million Euros—projects co-funded by the European Commission’s Horizon 2020 work program. 4See generally Eur. Comm’n: Horizon 2020, https://ec.europa.eu/programmes/horizon2020/en (last visited Feb. 11, 2020). The WiseGRID project provides a set of solutions, technologies, and business models, which increase the smartness, stability, and security of an open, consumer-centric European energy grid. It also provides cleaner and more affordable energy for European citizens through an enhanced use of storage technologies, electro-mobility, and a highly increased share of Renewable Energy Resources. It aims to deliver the tools and business models that will facilitate the creation of an open market and enable all energy stakeholders to play an active role toward a democratic energy transition.

By communicating with the partners participating in the project and with key energy stakeholders in the EU region as part of the project’s dissemination activities, we were able to extract the necessary information to create a number of archetype business models using the methodology described in the previous sub-sections, a subset of which we are presenting in this Article. Furthermore, as part of project activities these models are currently under implementation (as part of project’s pilots) and evaluation.

A key element in the business models are the Smart Grid products and services that create value for all the involved players. The example products that we will refer to in the next Section, developed in WiseGRID are the following, as depicted in Figure 2:

These tools belong in certain market segments serving as examples for purposes of our analysis. They can easily be substituted in terms of functionalities found in the market today.

Figure 2: WiseGRID Tools for Smart Grids and Relevant Market Segments

Insert fig2

C. Analysis of Archetype Business Models for a Decentralized Smart Grid

This Section presents a selection of archetype business models that correspond to the different areas to be addressed in Section II. They are presented and analyzed using the methodology discussed in Section I, i.e., a value network analysis and business modeling canvas.

1. Electric Vehicles: Exploiting the Integration of EVs in the Grid

This Section analyzes the business cases originating from the electrification of the transportation sector, i.e., the integration of the EVs and their charging infrastructure in the smart grid. The business cases consider an Electric Vehicles Supply Equipment Operator (EVSE), managing a charging station and an EV fleet manager who owns many EVs and aims to charge them economically, meaning that the latter actor undertakes the role of the prosumer. The EV fleet manager also owns and operates an EV management platform like the WiseGRID WiseEVP tool, which we will use as an example here that considers the charging constraints of each individual EV—such as the required charging level at a specific time instant—and computes their collective flexibility capabilities.

The EV fleet manager, may use the consumption flexibility to provide DR services to the DSO. The DSO may request such services aiming to control the power flow at the specific regulation area where the EVSE is located. Multiple reasons may trigger such an event including the avoidance of RES production curtailment (DR for consumption increase) or the smooth-out of the grid congestion (DR for consumption decrease). More specifically, the DR requests may refer only to the G2V process where the consumed energy is used to cover the needs of the EVs. For instance, part of the DSO’s grid may be congested and consequently the DSO will initiate a DR request, aiming to maintain the RES production within a specific area closely to the RES. Otherwise, the DSO should prevent the RES from injecting power in its grid and consequently should pay the relevant compensation to the generators for the curtailment. Alternatively, we may consider the case when the distributed RES connected with the grid of the DSO produces more than the demand and thus the DSO must pay to the TSO the regulated transmission tariffs.

Aiming to avoid the potential costs, the DSO initiates a DR request to increase the local consumption within the regulation area. The DSO requires the consumption of a specific volume of energy during a specific time period and provides an amount for each consumed unit. It is reasonable to consider that the total amount of money offered must be less than the potential costs of the DSO. Additional services are possible, including also the V2G process. For instance, the DSO may require a bidirectional DR event, i.e., both the consumption of a volume of energy but also its injection back to the grid at some specific future period (the alternative fuels directive encourages the EU Member States to develop systems which enable EVs to feed power back into the grid). 5 Council Directive 2014/94, 2014 O.J. (L 307) 1, 5 (EU). Apart from the DR services, the DSO may request the provision of ancillary services, which may be supported by the EVs’ batteries, such as the voltage regulation and frequency control.

In order to offer services that increase their revenues or decrease their costs, the EVSE provider and the prosumers (in our case the EV fleet manager) may participate in the value network as members of a Virtual Power Plant. The VPP operator bids aggregated bundles of services from EVSE provides (potentially along with services from other providers) in the relevant balancing and ancillary service markets and offers them part of his revenues (paid by the DSO) for their contribution in realizing the requested services. Then, the EVSE may propagate to the EV fleet manager lower charging prices during the DR event period and the EV fleet manager may reschedule the charging pattern of the EVs (by means of the electric vehicle management platform), attempting to reduce his operational costs. Alternatively, the business model may consider bilateral agreements between the DSO and the EVSE Operator, skipping the intermediary role of the VPP Operator. This is feasible because the DSO has knowledge about the location of the EVSE infrastructure and may directly request a service from the suitable actor who is located at the regulated area of interest. For reasons of simplicity, we consider the latter scenario below. All the extra functionalities that the EVSEs provide to the smart grid, respect the preferences of the EV user, meaning his constraints (e.g. charge required to be completed within a certain time frame) will be prioritized in the charging sessions scheduling process.

Concerning the actor who bears the purchase, installation, and maintenance cost of the EVSE infrastructure, the BM assumes a liberalized competitive market and consequently considers that the EVSE Operator undertakes this investment. For completeness reasons we mention that according to the strategy in some Member States, the DSO may lead this investment to stimulate the penetration of EVs in the market, while its incurred cost is included in the policy of the regulated assets. Once the market develops, the DSO may sell this infrastructure to market parties (e.g. via auctions) to cover the remaining cost and open the way to competition.

An extended scenario could also consider owners of a single EV who charge them at a public charging station (operated by the EVSE provider) and aim to achieve benefits by participating in the aforementioned services. In this case, the contractual agreement between the EV Fleet manager (who provides the sophistication of the WiseEVP tool) and the owner of the EV must be mutually beneficial. For instance, if the vehicle is planned to be charged during a DR event (requiring increase of consumption, as described above), then the EV fleet manager should receive a payment by its owner for advising this less costly schedule, while the latter actor is still favored by the lower prices. In the case that the EV participates in the provision of ancillary service (e.g., the frequency control), the EV fleet manager should keep a portion of the compensation that corresponds to this specific EV, according to its contribution.

The added value of an EV at the unitary level, e.g., a domestic prosumer owning a single EV who charges it with his private EVSE, may be incorporated in issues of storage, which investigate the relevant benefits from the batteries’ integration and storage in the grid. Indeed, the EV may be considered as a battery with intermittent availability, a parameter that may be formulated as a constraint in the relevant local-level optimization objectives.

Finally, we mention that the sophistication of an Electric Vehicle management tool like the example WiseEVP may be also utilized when the retailer or the DSO propagates dynamic prices to the EVSE Operator. An illustrative example is Spain, where a new discriminatory tariff has been proposed for promoting the charging of EVs at times of lower demand and lower prices. 6Council of Eur. Energy Regulators (CEER), CEER Status Review on European Regulatory Approaches Enabling Smart Grids Solutions, C13-EQS-57-04, at 14, (2014) [hereinafter CEER 2014 Status Review]. In this context, the functionalities of the tool should define the least costly charging schedule subject to the above constraints.

EV usage has continued growing over the past years, according to Electric Vehicle Initiative (EVI) Global EV Outlook 2017. 7 Int’l Energy Agency, Global EV Outlook 2017: Two Million and Counting, OECD/IEA 2017. The EU takes the lead in relative numbers of EV per capita, whereas The People’s Republic of China has the greatest absolute stock of electric vehicles. The report states that the electric car stock will range—with good chance—“between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025.” 8Id. at 6. These numbers are on par with the targets of the Paris Agreement on climate change. Nevertheless, there are still regulatory and financial obstacles that hinder the higher penetration of EVs compared to their conventional counterparts. For instance, in Norway and the Netherlands, where EV sales are very high, regulatory incentives have played a large role in promoting consumer interest. 9 Paul Hockenos, With Norway in Lead, Europe Set for Surge in Electric Vehicles, Yale Env’t 360 (Feb. 6, 2017), http://e360.yale.edu/features/with-norway-in-the-lead-europe-set-for-breakout-on-electric-vehicles); The Int’l Council on Clean Transp. (ICCT), Eur. Vehicle Market Statistics (2015–2016). These incentives include tax exemptions on EV purchases, one-off grants, and the imposition of taxes on fossil fuels. In Belgium, Greece, Hungary, Latvia, and the Netherlands, for instance, there is a full registration tax exemption on EV Purchases, while Denmark and Finland provide a partial exemption. 10Eur. Environment Agency (EEA), Electric Vehicles in Europe, No. 20/2016, at 60 (2016). Other financial schemes employed by governments are fixed grants, as employed in France and Portugal for the replacing of an end-of-life vehicle with a new electric vehicle.

Another barrier is the development and installation of the necessary infrastructure (particularly of the charging points) because the new fast charging technology is not only expensive to install, but also requires high voltage input and therefore the associated consumption fee is high. Governments have also taken various actions towards this direction. 11Id. at 14. For instance, France has set up a special fund for the construction of charging infrastructure, which led to the construction of 5,000 charging points in 2015, while in Sweden those individuals who installed charging points in their homes obtained a tax reduction for the associated labor cost.

Table 1 below shows a generic business model for integrating EVs in the network, and Figure 3 below shows the generic value network for integrating EVs in the network.

Table 1: Generic Business Model for Integrating EVs in the Network in Canvas Form

Actors Involved

  • Prosumer: EV Fleet Manager

  • EVSE Operator

  • DSO

Roles Involved

  • Power consumption (role performed by EV Fleet manager by means of the EVs that manages).

  • EE & EM Services (role performed by EVSE Operator providing the EVSE).

  • Power distribution (role performed by DSO through WG Cockpit).

Value Proposition

EV Fleet Manager

  • His charging preferences will be met.

  • Will provide flexibility to the system only when he wants to.

  • Will reduce his operational cost by utilizing the inherent flexibility capabilities and the storage equipment of the EVs.

 

EVSE Operator

DSO

Revenue Streams

EV Fleet Manager

  • Will decrease its charging cost by utilizing the EVs’ flexibility and shifting their consumption during the DR events.

  • Will receive revenues from the participation in V2G services, allowing (e.g.) the injection of energy from the EVs’ batteries in the grid.

EVSE Operator

DSO

Cost Streams

EV Fleet Operator

  • Economic investment in software (like WiseEVP) and communication channels and technologies with the other participation tools.

EVSE Operator

DSO

Barriers

EV Fleet Manager

  • Limited idle time of the EVs during the day to allow dynamic charging or V2G, because the batteries of the vehicles take long to be fully charged.

  • Idle time of the vehicles is mostly at night, thus not many opportunities appear to answer grid requests.

  • Rapid aging of batteries if too many recharge cycles are applied, leading to faster replacement costs.

EVSE Operator

DSO

 

Figure 3: Generic Value Network for Integrating EVs in the Network

Insert fig3

2. Demand Response: Supply-Demand Balancing by Means of Implicit DR Events

The following identified archetype BM investigates the added value provided by an energy aware Demand Response tool (such as the WiseCOOP tool) to the retailer, for meeting its obligation of a balanced portfolio by means of implicit DR events. Recall that the implicit DR refers to the propagation of dynamic prices by the retailer to its clients to incentivize them to reform their consumption pattern. Thus, the BM investigates the added value provided by the tools that manage the consumption and production of the prosumers at the local level, in terms of mitigating the risk of high electricity bills due to their exposure in dynamic pricing schemes.

According to the basic investigated scenario, the retailer handles the balancing responsibility on its own, meaning that it also undertakes the role of the Balancing Responsible Party (BRP). Focusing on the functionalities of the WiseCOOP tool (to be mentioned below), we consider that the retailer/BRP does not manage generation units and consequently does not have the option of production rescheduling. Thus, a balanced position consists of the equalization of its clients’ consumption with the volume of energy purchased (reserved) in the wholesale market. In what follows, we consider the case of when the retailer’s forecast about the demand of its clients, and consequently, the volume of energy purchased in the day ahead of wholesale market, does not match the actual consumption. In the case of a negative imbalance, i.e., when the reserved energy is not adequate to cover the actual demand, the retailer/BRP may purchase further energy in the intra-day market, but such a choice may be particularly costly. In the opposite case, the retailer/BRP must pay an imbalance penalty to the TSO for its inaccurate estimation 12KU Leuven Energy Inst., The Current Electricity Market Design in Europe 3 (2015).

The scenario assumes that the retailers’ customers have already signed contracts that expose them to dynamic pricing schemes. In what follows, we describe the potential benefits from accepting such an exposure. The retailer’s tool may gather all the necessary data from each individual prosumer—by means of the communication between the relevant tools—that let this agent know how they adapt their consumption with respect to the prices, environmental conditions, and social events. The retailer uses this knowledge to compute a response with these parameters in mind. Utilizing this information and the energy management tool, the retailer is aware of the appropriate level of the prices, which should cause the desired collective modification in the demand profile of its clients (load shifting/shedding) and will result in a balanced energy portfolio. The calculation may either refer to personalized prices for each individual client or to common prices for all the members of its clientele.

The dynamic prices are propagated both to residential prosumers and tertiary buildings via the energy management tools. With regard to their operation, the basic business scenario considers that it is performed by an ESCO, which receives revenue streams as a portion of the prosumer’s bill savings. The BM considers prosumers who have installed batteries and may store energy from the grid during periods of low prices and consume it when the electricity is more expensive. Additionally, the prosumers have installed RES and may compare their revenues from the injection of their production in the grid, with the savings from a reduced electricity bill if they choose to self-consume/store. In this context, the main business role of the ESCO is to provide, by means of the tools it manages, the optimal scheduling of the assets at the local level such that the revenues of the prosumers are maximized (or their billing cost is minimized), always taking into consideration their price sensitivity and their convenience constraints or preference. Thus, the tools must present the optimal schedules of the assets in a user-friendly way, which will allow the prosumers to easily adopt the proposed schedules and understand their potential revenues. Apart from the economic incentives, the response of the domestic prosumers to dynamic prices may be stimulated by social and ethical parameters, such as the feeling of working together toward a common purpose and the impact of comparisons and competition with other peers of the communities (e.g., neighbors). Such functionalities should also be provided by the tools managed by the ESCO to stimulate the efficient response of the occupants to the dynamic prices because its revenues strongly depend on their consumption rescheduling (being a portion of the electricity bill savings).

From the perspective of the retailer/BRP, this BM exploits the added value offered by tools for DR planning like the WiseCOOP tool stemming from better demand-side management, in terms of reducing or eliminating the cost that is related with an imbalanced portfolio. From the prosumer’s perspective, it exploits the added value provided from energy management tools at the consumer (e.g. home) level. The added value may be quantified by comparing prosumers who follow the optimal schedules provided by the tools’ functionality, with those who maintain their flat-fee consumption pattern despite the propagation of dynamic prices by the retailer. Additionally, it may be quantified by estimating the gains for those prosumers who accept the retailers’ favorable contracts. For instance, a candidate contract between the retailer and a prosumer may combine a dynamic pricing scheme in the form of critical peak pricing during the peak periods, and flat rates for the rest of the time. Then, the prosumer may accept such a contract if the level of the flat prices is lower than those in a contract that does not include any dynamic scheme. The optimal consumption-suggestions of the tools should guarantee that such a choice will result in lower electricity bills for the prosumer.

We clarify that this type of DR event is characterized as implicit, because the retailer does not require a specific volume of consumption curtailment but provides economic incentives for consumption shifting/shedding via dynamic pricing, while the prosumers voluntarily respond to such signals. However, this voluntary nature of implicit DR makes the intervention of an ESCO questionable and is one of the main barriers for the development of such business models. Indeed, the prosumers may not always appropriately shift their consumption according to ESCO’s suggestions. As a direct result the anticipated savings in the retailer’s bill will not (or partially) be realized and the ESCO will lose its source of revenues. To overcome this risk, the business model proposes alternative forms of revenue streams for the ESCO. For instance, it could require a flat fee from the prosumers for providing its optimal suggestions, along with the portion of their bill savings. Additionally, the ESCO should strategically choose the suitable subset of prosumers to offer its services, based on an analysis of their price sensitivity, which reflects its potential revenues. Nevertheless, the revenues of the ESCO may not justify its business role, especially for domestic prosumers whose payback from their participation in the implicit DR events are not expected to be noteworthy. To this end, the business model suggests alternative options for the commercial exploitation of tools that schedule the local assets, such as the WiseHOME and the WiseCORP. For example, in the context of the current scenario, the retailer may provide these tools free-of-charge (or at the price that equals their development cost) to its clients to help them participate more efficiently in the implicit DR events, while protecting them from their exposure to the dynamic pricing schemes. In this case, the retailer objective is not to achieve direct revenues from selling the tools, but rather to utilize them for meeting a balanced portfolio, while keeping its clientele satisfied by the offered service and preventing them from switching to any of its competitors. We emphasize that such services are of importance in a liberalized market because the consumers have the right to change their supplier without any extra charges.

Concerning the regulatory barriers, the CEER’s study revealed that seventy-one percent of the sampled European countries used only static time of use tariffs, a pricing scheme which clearly does not provide the field for the implicit demand side response to be realized. 13See CEER 2014 Status Review, supra note 6. Despite this fact, Time of Use pricing schemes appear in countries like Greece, where there are differential tariffs for peak and off-peak consumption for residential consumers. 14See generally Residential Night Tariff, PPC, https://www.dei.gr/en/oikiakoi-pelates/timologia/oikiako-timologio-me-xronoxrewsi-oikiako-nuxterino (last visited Feb. 11, 2020). However, not all European States apply “price signals” to induce customers to change their consumption patterns.

From a technical perspective, demand response programs should be made as easy as possible for consumers to participate. In addition to concentrating on the rewards side of the equation, attention should be devoted also to the cost side; consumers will have to invest as little time and effort as possible, so that they might engage in demand response even if the financial rewards are not very high in absolute terms. In this context, automatization of responses appears to be crucial: consumers will not have to do anything because adjustments in their consumption patterns will be automatic.

Finally, it is now well-known, in part, due to studies from the discipline of economics, that the efforts of policymakers to empower consumers are often frustrated by the fact that consumers do not react to efforts to alter their consumption patterns. Ironically, this is because they do not see the financial gain as sufficient to reward altering their consumption. In light of this difficulty, the involved tools must provide additional information apart from the economic savings to be achieved, such as the environmental benefits from the reduction of the CO2 emissions when shifting the consumption during period of high RES generation. Such types of incentives have been observed to stimulate the user’s participation in DR events and are considered a major drive for their active engagement. 15Smart Energy Demand Coalition, Mapping Demand Response in Europe Today 27 (2015).

Table 2 provides a generic business model for demand response in canvas form, and Figure 4 depicts a generic value network for demand response.

Table 2: Generic Business Model for Demand Response in Canvas Form

Actors Involved

  • Prosumer

  • Retailer

  • ESCO/(EE&EM)

Roles Involved

  • Power Consumption & Production, Energy Storage (role performed by domestic and tertiary prosumers).

  • EE and EM Services (role performed by the ESCO, which manages the functionalities of the WiseHOME and WiseCORP tools).

  • Power Retailing (role performed by the retailer).

Value Proposition for Involved Actors

Prosumer

  • A prosumer who participates in the implicit DR events may negotiate favorable contracts with the retailer (as described above).

  • Prosumers who have installed RES and generate electricity can utilize self-balancing to generate added value through the difference in the prices of buying, generating, and selling electricity.

  • Prosumers who have installed batteries in their households/premises may adapt their electricity consumption profiles according to the dynamic prices with a lower inconvenience cost and utilize to higher extent renewable energy sources.

  • Will be able to follow more accurately the optimal schedules by means of their visualization, while they remain within their comfort zone.

Retailer

ESCO

Revenue Streams

Prosumer

  • Reduced electricity bill by means of load shifting/shedding and the use of batteries.

  • Better utilization of RES by comparing the consumption prices (retailer) with the potential revenues from grid injection to make the optimal decision: either self-consume or sell.

Retailer

ESCO

Cost Streams

Prosumer

  • Part of their savings are given to the ESCO for providing the optimal consumption and RES generation schedules.

Retailer

ESCO

Barriers

Prosumer

  • The insufficient economic benefits from their participation on implicit DR programs.

  • The lack of information about the further benefits achieved by the DR programs, such as the environmental ones, that would strongly stimulate the active participation of the environmental-sensitive individuals.

  • The lack of automation equipment that would make their engagement in DR programs more convenient.

Retailer

 

ESCO

Figure 4: Generic Value Network for Demand Response

Insert fig4

3. Storage: Prosumers-Driven Energy Storage Integration

This Section analyzes business cases and potential business models driven by the integration of energy storage systems at the prosumers’ premises, in either domestic or tertiary buildings and focusing on the added value of services that may arise from their utilization. Our analysis clusters the services according to the level of their implementation, a parameter which also determines the involved actors. On the local level, the batteries are used to optimize the revenues of a single prosumer, while on the aggregation level the VPP Operator (aggregator) pools the storage capabilities of multiple individual prosumers, targeting to offer more demanding (in terms of storage capacity) services to further actors of the smart grid, such as the DSO.

More specifically, on the prosumer level the integration of batteries can result in consumption patterns which are less dependent on variable energy prices. For instance, the prosumer may be exposed to dynamic prices propagated by the retailer (either time-of-use or real-time schemes). Then, the storage unit operation may be scheduled according to the prices’ fluctuations; charged when energy prices are low and discharged when energy prices are high. As a result, the prosumer may achieve a reduced retailer’s bill, while limiting the impact of consumption shifting on his convenience preference. An extended scenario (still on local level), may consider a prosumer who has also installed RES on his rooftop. In this situation, the prosumer may decide the most profitable strategy, in terms or revenues maximization: (1) either store the self-production to meet his own future needs; or (2) inject it in the grid and receive the relevant payment. The monitoring and configuration of storage units at the prosumer level will be mainly supported by the ESCO which owns and operates tools for energy management (like the WiseHOME and WiseCORP tools), for residential and tertiary buildings. According to the basic business model, these companies receive a portion of the prosumers’ savings or profits, as a revenue for the provided services.

The individual prosumers may achieve additional benefits from installed storage systems, by their collective participation in a Virtual Power Plant (VPP). The VPP Operator bids in the ancillary and balancing markets for services requested by the DSO, which contribute to the smooth operation of the grid. Such services may be frequency-control, reactive power and voltage control, back-up service, and peak shaving for grid congestion management. The VPP Operator aims to expand its portfolio with prosumers owning batteries, because such members may participate more actively in DR events and more importantly are necessary for provisioning a subset of the aforementioned services. To this end, the VPP Operator must invest in the communication, metering and control infrastructure needed for the data collection from the batteries and use such data as input for developing sophisticated algorithms for their scheduling in the market participation. Furthermore, the VPP Operator collects data by means of energy management tools from the markets related to the requests for services provisioning. Then, the VPP Operator combines these types of data, in order to decide the most profitable utilization of its assets. More specifically, when the VPP Operator receives simultaneous requests for multiple services, the algorithms of the software/tool that manages the storage-as-a-service (like the WG STaaS/VPP tool) determines which batteries (prosumers) should participate in each one. This decision is based both on the batteries’ characteristics, such as their availability and cost functions with respect to their aging and losses and on the forecast of the local production and consumption such that the prosumers’ convenience preferences are not violated. On the aggregation level, the VPP Operator allocates the monetary amount paid by the DSO to its customers according to their contribution in the service realization, while keeping a reasonable portion for its own services. Additionally, the VPP Operator may gain revenues by requiring a participation fee from his members. Also, in this scenario, the ESCO suggests the optimal consumption patterns at the local level, to satisfy the request of the VPP Operator, and receives a portion of the offered compensation for its services.

For all the preceding services, the BM may capture two alternatives with respect to the batteries’ ownership. The former assumes that the prosumer pays and owns the batteries—i.e., the batteries are considered as a capex cost for this actor. In this situation, the BM will compute the added revenues that the prosumer attains through the batteries due to increased economic coverage of his own needs and active participation in ancillary services—compared to a consumer who does not own batteries. The added revenues should exceed the initial investment—the cost of purchasing and installing the batteries—within a reasonable time interval in order of years and provide income to the prosumers thereafter, till the end of their lifecycle.

The second case considers an additional actor in the value chain, namely Storage Unit Operator (SUO), who bears the capex cost of the batteries and installs them at the prosumers’ premises, aiming to offer storage services. This actor may allocate only a portion of the batteries’ capacity for meeting the prosumer’s needs and his revenue-maximization strategies at the local level, while the rest may be assigned for providing services that are requested by the VPP Operator. For its former contribution, this actor may receive revenues in the same form as for the ESCOs which manage the energy management tools, i.e., it exploits a portion of the added value created for the prosumers due to the batteries’ presence. In this case, the contractual agreement between the two parties must explicitly specify the portion of the batteries’ capacity which is associated with local needs. Because its revenue streams are identical with those of the ESCO, in what follows we assume for simplicity reasons that the ESCO undertakes also the role of the SUO.

This business model may be extended to investigate the added value gained by prosumers from the integration of EVs, due to their inherent storage capabilities. The main difference with a conventional battery is both its capacity limitations and its availability when needed to perform the services discussed above—with the latter strongly dependent on the prosumer’s lifestyle pattern. The EV primarily consumes enough electricity to cover the threshold of its own transportation needs and supply for secondary devices. Thus, the EV is expected to significantly increase the consumption of the households. As a result, the role of the ESCO in this case is even more crucial to provide the optimal consumption schedules according to the varying prices within the planning horizon, while also meeting the other objectives at the local (V2H) and aggregation (V2G) levels as described above.

Concerning the regulatory barriers for the implementation of the aforementioned business models, this Section focuses on those related with the installation of the storage units and briefly mentions those which refer to the operation of the VPP Operator. More specifically, the regulation of storage assets faces many conceptual and practical challenges since there is no consensus on the definition of storage assets. Particularly, whether storage assets should be treated as generation assets or consumption units. This lack of clarity stems from the fact that, while storage assets can generate electricity in the literal sense of “generation,” the amount of electricity generated is typically not enough to provide a net positive flow to the electricity system. 16 Giorgio Castagneto et al., Regulatory Barriers to Energy Storage Deployment: The UK Perspective, 2016 RESTLESS Project 1, 2. On the other hand, storage assets cannot be properly classified as consumption units because they do not actually consume the energy that they take up. Could they also be classified as part of a transmission or distribution network, given that they can be a bridge asset between generators and final consumers? The answers to these questions are fundamental to the development of an appropriate regulatory regime as they impact on inter alia ownership, pricing and the imposition taxes and levies.

For instance, in Spain, under the Electricity Sector Law 24/2013, battery owners are not allowed to reduce the maximum power they have under contract with their supplier. 17See generally B.O.E. n. 310, Dec. 27, 2013 (Spain). While it may be argued that this policy is intended to maintain grid integrity, when coupled with the high self-consumption tax, the regulatory regime for self-consumption and storage appears to be ill-considered. In some cases, the regulatory framework not only does not promote, but rather, hinders the development of storage. For example, in some countries taxation is not favorable to storage, as typified by the “Grid Fee System.” 18See Sören Amelang, Power Grid Fees—Unfair and Opaque?, Clean Energy Wire (Jan. 26, 2017), https://www.cleanenergywire.org/factsheets/power-grid-fees-unfair-and-opaque. Ordinarily, grid fees are paid by the final consumers of power, as a fee for the transportation of electricity through the grid network. In the case of storage, operators of storage assets are first charged for charging the storage asset and then also for discharging it, because of the notional double flow of electricity. In real terms, the storage asset is neither a producer nor consumer. Therefore, the strict application of the traditional grid fee model should not extend to storage assets. Often, this double taxation is higher than power prices, resulting in a very strong dis-incentivization of electricity storage. 19 Jason Deign, Spain’s New Self-Consumption Law Makes Batteries Impractical for Homeowners, GreenTech Media (Oct. 16, 2015), https://www.greentechmedia.com/articles/read/spanish-self-consumption-law-allows-batteries-at-a-cost.

Finally, concerning the operation of the VPP aggregator, there are generally no standardized contractual arrangements governing the roles and responsibilities of this distinct actor. Furthermore, it is often impossible in practice, or even not allowed by the law, to aggregate consumers’ flexibility. Even though in some countries demand response is a commercially viable product, remaining a key obstacle is the requirement for aggregators to get the prior agreement of the customer’s supplier/balancing responsible party—needed in order to be able to contract with the customer. 20Smart Energy Demand Coalition, supra note 15, at 55.

Table 3 below is a generic business model description for prosumers-driven energy storage integration in canvas form. Figure 5 offers a generic value network for prosumers driven energy storage integration.

Table 3: Generic Business-Model Description for Prosumers-Driven Energy Storage Integration in Canvas Form

Roles Involved

  • Power consumption and production (role performed by domestic / tertiary consumer with installed RES units).

  • Energy Storage (role performed by prosumer with batteries or by the ESCO acting also as “Storage Unit Operator”).

  • EE & EM Services (role performed by the ESCO which operates the functionalities of the energy management tools).

  • Power distribution (role performed by the DSO).

  • Aggregator services (role performed by the VPP Operator).

Value Proposition

Prosumer

  • Will be able to increase its self-consumption.

  • Will be less dependent to the fluctuations of the retail prices and thus will reduce his electricity bill.

  • Will be able to meet its energy demand at all times.

  • Will be able to monitor its own production and consumption.

  • Will be able to provide services to the VPP Operator (aggregator) and thus generate additional income.

ESCO

DSO

VPP Operator

Revenue Streams

Prosumer (consumer with batteries and RES)

  • Reduction of the energy bill through time-of use management and enhanced self-consumption.

  • Additional revenues from its more active participation in DR events, and other services that require the batteries installation.

ESCO

 

DSO

VPP Operator

Cost Streams

Prosumer (consumer with batteries and RES)

  • The investment cost for buying and installing the batteries.

  • A portion of the achieved added value (revenues for participating in DR events and offering ancillary services, or decreased electricity bill of the retailer) is given to the ESCO for its services provision.

  • Participation fee to the VPP Operator.

ESCO

DSO

VPP Operator

 

 

Barriers

 

 

Prosumer

  • The regulatory framework may not allow the potential savings to appear and consequently hinder the development of storage (e.g., the Spain case, where the battery owners are not allowed to reduce the maximum power under contract with their retailer). 21See generally B.O.E. n. 310, Dec. 27, 2013 (Spain).

  • Regulatory provisions may render business model non-profitable, e.g., by maintaining network charges on storage (charged for the double flow of electricity).

ESCO

VPP Operator

DSO

 

 

Figure 5: Generic Value Network for Prosumers Driven Energy Storage Integration

Insert fig5

4. Archetype BM for Exploiting Prosumers Flexibility—The Role of a Virtual Power Plant

The archetype BM in this Section investigates the added value to be gained by the participating actors in an explicit DR event. Central role in the BM has the Virtual Power Plant (VPP) which represents a basic component of an interactive and dynamic distribution network, as a system that integrates many resources, such as RES, energy storage systems, and flexible/controllable loads of domestic and tertiary prosumers. According to the basic business scenario, at the local level (for each individual household or tertiary building) these resources are scheduled by the responsible ESCOs to regulate energy management tools at the home and building level, like the WiseGRID, WiseHOME, and WiseCORP tools, to optimally meet the needs of the occupants. At the aggregation level, the production capacity and consumption flexibility of these heterogeneous resources can be pooled, and the energy surplus can be utilized to offer additional services. In that sense, the VPP Operator acts as an aggregator and represents an intermediary between the prosumer and energy markets, while its business role consists in identifying the most profitable utilization of VPP resources.

More specifically, the VPP Operator can participate in Day-Ahead and Intraday wholesale markets for selling the energy surplus and in the Balancing markets for offering consumption flexibility and DR services to other actors of the grid, e.g., the DSO. 23See e.g., Day-Ahead and Real-Time Energy Markets, ISO: New England, https://www.iso-ne.com/markets-operations/markets/da-rt-energy-markets/ (last visited Feb. 12, 2020). Aiming to maximize the revenues of its participants while satisfying their convenience constraints, the VPP Operator first selects—by means of the WiseCORP and WiseHOME tools—the forecasts of the local RES production and combines it with the forecasted demand of its members aiming to compute their surplus. Then, the VPP Operator compares the potential revenues from the two markets and decides the most profitable schedule for its assets: either sell the consumption surplus or store it to cover future local needs. Additionally, the VPP Operator computes the most profitable schedule of each individual VPP member’s resources. The VPP Operator’s tool (such as the WG STaaS/VPP) sends these optimal strategies to each individual prosumer, using the communication channels and the relevant tools.

In the case of a DR event, the VPP Operator explicitly requests from a subset of its members their consumption shifting/shedding of a specific volume of power within a specific time duration. For instance, the DSO may request the self-consumption (or storage) of the RES production to avoid a curtailment, or a consumption shift that would relieve its grid from congestion. Depending on the VPP Operator’s contracts with its members, the VPP Operator may offer a payment for the consumption rescheduling or may apply direct load control. In the former case, the VPP Operator first chooses the most appropriate prosumers to participate in the DR event, according to their potential in satisfying the DR requirements and the level of compensation they request. The DR signal along with the payment level is sent to the WiseCORP tool, which computes the optimal rescheduling of the local devices. In the case of direct load control, the VPP Operator computes and sends the optimal schedules for the devices in the tertiary building, while the role of the WiseCORP tool is limited to their implementation. In both schemes, the participation of the prosumers in the DR is quantified by comparing their actual consumption during the event with their individual baselines—consumption under normal conditions, in the absence of DR request—which are derived by elaborating historical data. The VPP Operator manages the compensations for its members according their involvement and contribution to demand response campaigns and the energy surplus provided. Concerning his revenue stream, the VPP Operator may require a participation fee from each individual member and keep a portion of their profits from their participation in the wholesale markets and the DR events.

Ultimately, the aim of this BM is to investigate the added value gained by the prosumers from their participation in the VPP, due to the more efficient utilization of their production and consumption-shifting capabilities both at local and aggregation level, according to the advice of the VPP Operator. As mentioned above, the additional potential revenues will be gained by purchasing their production surplus in the wholesale market (compared e.g., with the regulated feed-in tariffs or premiums for the participation of small-scale producers below 10KW in the markets) and by participating in DR events. Furthermore, this BM investigates the added value that will be provided by the WG STaaS/VPP tool to the VPP Operator. The potential additional revenues are expected to be realized mainly due to the optimization functionalities of the tool, which allow the agent to decide the optimal assignment of the requested services to its assets and consequently increase the set of services that may be offered (e.g. increase the magnitude of demand shifting that the VPP Operator can offer in the balancing market). Additionally, the optimal advice given to the prosumers is expected to extend its clientele (more prosumers willing to become members of the VPP) and thus its revenues. In this context, it becomes apparent the crucial importance of the VPP Operator’s tool for his viable business activity. More specifically, its sophistication must result to the real-time optimal assignment of the VPP assets among the alternatives that arise in the wholesale market (energy selling or DR participation). In this way, the VPP Operator will be able to offer competitive bids to the DSO and achieve increased gains for its members, a fact that results in an extended portfolio and higher market share. The role of the ESCO in these scenarios is aligned with those in the other BMs—i.e., to reschedule the consumption of the devices at the local level—such that the consumption pattern communicated by the VPP Operator is met.

For clarity, this archetype BM assumes that the prosumers own the RES. Nevertheless, the BM and the relevant value network may be appropriately modified to include also the case when a RESCO owns and operates the RES, when this parameter is clarified in the pilot sites. The relevant contracts must be carefully designed to resolve conflicting interests between the involved parties. Such issues may arise in the case of a contract between a consumer and the RESCO (renting his/her rooftop), which specifies the portion of generation that may be consumed locally on an hourly basis. Then, if the VPP Operator require from the consumer an explicit DR lasting for a shorter interval (e.g., half an hour), the prosumer may require from the RESCO to consume all the agreed portion of the local generation during the event, aiming to avoid the inconvenience cost while earning the compensation by the VPP Operator. This action may be against the interests of the RESCO if the wholesale price is high at the same time, because it misses the opportunity to maximize the profits from its generation.

Concerning the barriers that may prevent such BMs to be realized, we distinguish between the technical and legislative perspective. As for the technical perspective, many European countries lack a standardized framework for the measurement of the baseline consumption. Which, as mentioned above, is considered as a comparison benchmark for the quantification of the load shifting/shedding during the DR event. Consequently, there may be an inaccurate estimation of the consumer’s contribution. Thus, inadequate payment for offering their flexibility, which clearly results in weak incentives for participants. Furthermore, the business activity of the aggregator strongly depends on the installation of certain infrastructures for real-time communication of data and the automation of consumption rescheduling. The key intuition here is to install smart meters, which are not yet deployed in most EU Member States. 24See Frédéric Simon, Smart Meter Woes Hold Back Digitalisation of EU Power Sector, EURACTIV (Jan. 30, 2019), https://www.euractiv.com/section/energy/news/smart-meter-woes-hold-back-digitalisation-of-eu-power-sector/.

Considering the legislative perspective, in many Member States aggregated demand response is either illegal or its development is seriously hindered due to regulatory barriers. Indeed, load aggregators are not present in every EU Member State. 25See generally Paolo Bertoldi, et. al, JRC Science for Policy Report: Demand Response Status in EU Member States (2016)). The analogous consideration applies to regulatory frameworks governing their operation. In Italy, “the notion of load aggregator is not formally recognized and no regulatory framework currently exists.” 26Rafael Leal-Arcas, Solutions for Sustainability: How the International Trade, Energy, and Climate Change Regimes Can Help 378 (citing Paolo Bertoldi, et. al, supra note 25, at 69). Poland does not seem to be taking the required steps to foster the development of incentive-based (explicit) demand response. 27Smart Energy Demand Coalition, supra note 15, at 10–11.

Other European countries still present important regulatory barriers, notably program participation requirements not yet tailored for both generation and demand-side resources. For example, Austria requires consumers “to install a secured and dedicated telephone line to participate in the balancing market.” 28Id. at 10. Norway requires TSO signals to be sent over the phone, which makes the minimum bid-size high. 29Id. As a result, the participation of consumers other than large industrial consumers is hindered. Similarly, technical and organizational rules do not consider some of the requirements for the provision of balancing services in sufficient detail. Such as the negative impact of complex and lengthy approval procedures, and their associated costs, on market entry and participation.

Great Britain is deemed to have competitive energy markets and open balancing markets, though uncertainties for demand response have been cast by the emerging capacity market. 30Id. at 150. Great Britain was the first EU Member State to open many of its electricity markets to the demand side of things. 31See id. at 85. Currently all balancing markets allow the participation of demand response in general and aggregated load in particular. 32See id. However, according to the SEDC, “measurement, baseline, bidding and other procedural and operational requirements are inappropriate for demand-side resources[.]” 33Id. Thus, even though the markets are formally open, in practice, results in terms of demand-side participation have been worsening over time. Furthermore, the capacity remuneration mechanism introduced in 2014 is said not to place demand-side resources on a “level playing field” with generation resources. 34See id. at 167. Indeed, only one demand-side aggregator out of around fifteen operating in the market managed to secure a contract in the first capacity market auction. 35Id. at 85.

In Spain, even though some smart grid pilot projects are currently being developed, incentive-base (explicit) demand response is currently modest. 36Id. at 131. Even though there is one interruptible load program that allows incentive-based (explicit) demand response, the scheme is only open to large consumers and has not been used for several years. 37See id. at 79. Importantly, load aggregation is illegal. 38Id. at 10, 41, 45, 47, 68, 85, 131, 151.

Finally, even though load aggregators exist in some countries, such as France and Belgium, at the moment their activities are focused on the high and medium voltage levels of the transmission grid meaning that they only deal with the TSOs. 39See id. at 72; see also id. at 155. Clearly their business interaction must be extended also with the DSOs, aiming to contribute to the proper operation of the grid at the low voltage level (distribution).

Table 4 provides a generic business model description for exploiting prosumers’ flexibility and Figure 6 below offers a generic value network for prosumers driven energy storage integration.

Table 4: Generic Business Model Description for Exploiting Prosumers’ Flexibility

Actors Involved

  • Prosumer

  • ESCO

  • VPP operator

  • DSO

Roles Involved

  • Power Consumption / Production and Energy Storage: (role performed by either domestic or tertiary consumer with batteries and RES installed).

  • Aggregator Services (role performed by the VPP Operator managing the WG STaaS / VPP tool).

  • EE & EM Services (role performed by the ESCO, managing the energy management tools like WiseGRID’s WiseHOME and WiseCORP).

  • Power Distribution (role performed by the DSO, managing the WG Cockpit tool for sending the DR requests).

Value Proposition

Prosumer

  • Will be able to schedule its consumption, production, and storage capabilities more efficiently.

  • Will be able to sell its production surplus to the wholesale market.

  • Will receive additional revenues from its flexibility capabilities and its participation in explicit DR events.

  • Will have the opportunity to give its contribution for the environment protection, when participating in explicit DR events for the RES curtailment avoidance.

ESCO

VPP Operator

DSO

Revenue Streams

Prosumer

  • Payments from the aggregator for its contribution in the explicit DR events.

VPP Operator

EE&EM

DSO

Cost Streams

Prosumer

  • Part of its revenues will be given to the ESCO for the optimal schedule of the local devices.

  • Payment to the VPP Operator for becoming a member of the VPP.

VPP Operator

ESCO

 

DSO

Barriers

Prosumer

  • The lack of a standardized framework for the measurement of the baseline consumption and the inadequate installed equipment (smart meters) prevent the revenues from their contribution in DR events to be realized and hinder their active participation in such programs.

VPP Operator

 

 

Figure 6: Generic Value Network for Prosumers Driven Energy Storage Integration

Insert fig6

II. United Kingdom

A. Overview

This Section enumerates the energy strategy, policy framework and regulatory architecture underpinning the United Kingdom’s smart grid transition. It will further analyze the progress that the UK has made against its own strategic objectives in light of the WiseGRID project’s principal aim to: contribute to the energy sector new technologies and solutions for the improvement of the smartness, stability, and security of the European energy grid. In the hopes of further stimulating this discussion, this Section will conclude by evaluating the UK’s responses to the challenges that have arisen during its transition process.

The UK has set a series of targets for renewable energy. By 2020, the UK wants to derive 15% of its energy consumption from renewable energy sources. It has set individual targets for electricity (30%), heat (12%), and transport (10%). 40Department of Energy and Climate Change, National Renewable Energy Action Plan for the United Kingdom: Article 4 of the Renewable Energy Directive 2009/28/EC, at 5 (UK) [hereinafter DECC 2010]. It has also set an ambitious energy savings target, attempting to reduce its final energy consumption by 18% compared to 2007 levels. 41Department of Energy and Climate Change, UK National Energy Efficiency Action Plan, DECC, at 87 (UK) [hereinafter DECC 2014]. Finally, the UK has committed to reduce its greenhouse gas emissions by 80% by 2050, compared to 1990 levels. 42 Climate Change Act 2008, c.27, §1 (Eng.).

The UK has made great strides towards weaning itself off its traditional, coal-based energy industries. The nuclear industry remains a central plank of the UK’s energy strategy and is set to play a key role in the provision of clean, reliable energy to meet future demand. A number of nuclear projects are currently in the development pipeline. 43See generally John Parnell, Momentum Builds for UK Government to Self-Fund New Nuclear Plants, gtm (Jan. 15, 2020), https://www.greentechmedia.com/articles/read/momentum-builds-for-uk-government-to-fund-new-nuclear-itself. Renewable energy also plays an important role, particularly in Scotland. 44See Sophie Hirsh, Scotland’s New Target: 100% Renewable Electricity in 2020, World Econ. Forum, (July 17, 2019), https://www.weforum.org/agenda/2019/07/scotland-wind-energy-new-record-putting-country-on-track-for-100-renewable-electricity-in-2020/. Controversially, however, the UK is a proponent of hydraulic fracking: the drilling for shale gas. 45See What is Fracking and Why is it Controversial, BBC News (Oct. 15, 2018), https://www.bbc.com/news/uk-14432401. The re-commencement of operations in 2018 is at odds with its efforts to reduce carbon output.

The UK considers itself a leader in the green transition, and it has made solid progress towards many of its targets. In 2017, the UK saw renewable energy’s share of electricity generation jump to 29.3%. 46Dep’t for Bus., Energy & Indus. Strategy, Digest of United Kingdom Energy Statistics (DUKES) 2018: Main Report 1, 11 (2018) [hereinafter Digest of United Kingdom Energy Statistics]. With the UK now comfortably producing one quarter of its electricity from renewables, the overall target of 15% of its consumption from renewables seems increasingly achievable. Primary energy consumption fell by 15% and final energy consumption by 11% in 2015, compared to 2007. 47UK Government, 28 April 2017: UK National Energy Efficiency Action Plan and Annual Report, 1 (UK) [hereinafter UK National Energy Efficiency Action Plan]. By 2017, UK emissions were 43% below 1990 levels. 48How the UK is Progressing, Comm. on Climate Change, https://www.theccc.org.uk/tackling-climate-change/reducing-carbon-emissions/how-the-uk-is-progressing/ (last visited Feb. 13, 2020).

Notwithstanding its progress, there is widespread acknowledgement that efforts must accelerate if the UK is to reach its targets. There are particular concerns about a downward trend in green investment. The withdrawal of governmental support at a time of considerable market uncertainty appears to have compounded investor uncertainty. 49 Josh Gabbatiss, A ‘Hostile Environment’ for Renewables: Why has UK Clean Energy Investment Plummeted?, Independent (May 19, 2018, 7:14 PM), https://www.independent.co.uk/environment/uk-renewable-energy-investment-targets-wind-solar-power-onshore-a8358511.html. A hostile planning environment for onshore wind developments has also troubled proponents of the technology. 50 Josh Gabbatiss, Environmental Impact of Policies that Led to Collapse of Onshore Wind Was Not Considered by Government, The Independent (May 6, 2018, 11:30 AM), https://www.independent.co.uk/news/uk/politics/wind-power-onshore-policies-environmental-impact-government-collapse-a8334786.html. Obstacles to the full integration of storage and demand response technologies also remain in place.

With regard to smart metering technologies, the UK has been at the forefront of the smart meter transition. However, its Smart Metering Implementation Programme has also not been without its challenges. 51See generally Smart Metering Implementation Programme, Smart Energy Code Co., https://smartenergycodecompany.co.uk/smip/ (last visited Feb. 13, 2020). There are a number of novel aspects about the UK’s approach to the roll-out, but the one that has caused perhaps the most issues for the UK has been the decision to place the roll-out in the hands of the utility suppliers.

Thus, the policy framework for the low carbon transition is a mixed bag. While ostensibly in favor of the low-carbon transition, the implementation of policy continues to be informed by the incumbent market players. The consequential lack of clarity has allowed a climate of confusion to set in, with apparent knock-on effects for investment. Accordingly, while the strategic goals are clear, the implementation leaves plenty to be desired.

B. Energy Profile

1. Energy Mix

a. UK’s Targets

Decarbonization plays a key part in the UK’s energy strategy by virtue of a series of European and international commitments. With regard to the UK’s renewable energy targets, 15% of the UK’s energy consumption will be derived from renewable energy sources by 2020. 52 DECC 2010, supra note 40, at 5. Sub-targets for electricity (30%), heat (12%), and transport (10%) have also been set. 53Id. The UK’s progress is monitored and reported every two years, by reference to its targets and the detailed roadmap set out in its National Renewable Energy Action Plan. 54See id. at 4.

The UK has also committed to making ambitious energy savings, with a target to reduce its final energy consumption by 18% relative to 2007 levels. 55 DECC 2014, supra note 41, at 5. Finally, under the Climate Change Act 2008 the UK has committed to reduce its greenhouse gas emissions by 80% by 2050, compared to 1990 levels. 56See Simon Evans, In-Depth Q & A: The UK Becomes First Major Economy to Set Net-Zero Climate Goal, Carbon Brief: Clear on Climate (June 12, 2019, 4:18 PM), https://www.carbonbrief.org/in-depth-qa-the-uk-becomes-first-major-economy-to-set-net-zero-climate-goal.

b. UK’s Energy Mix

In 2017, up to 80% of the UK’s primary energy consumption was from fossil fuels, mainly oil and natural gas. 57 Jocelyn Timperley, Six Charts Show Mixed Progress for UK Renewables, Carbon Brief: Clear on Climate (July 30, 2018, 8:00 AM), https://www.carbonbrief.org/six-charts-show-mixed-progress-for-uk-renewables. However, the share of fossil fuels has declined in recent years, driven by a significant decline in coal production. 58See id.

Overall primary energy production in the UK increased by 1.2% in 2016 compared to 2015, 59Dep’t for Bus., Energy & Indus. Strategy, UK Energy in Brief 2017 1, 6. [hereinafter UK Energy in Brief 2017]. primarily due to the new fields starting production in the UK Continental Shelf (UKCS)—more projects have been recently announced. 60BP Development of Two New Fields Demonstrates Remaining Potential of UKCS, OGUK, https://oilandgasuk.co.uk/bp-development-of-two-new-fields-demonstrates-remaining-potential-of-ukcs/ (last visited Oct. 18, 2019). As a result, there was a rise in the production of primary oil (42%) and natural gas (32%). 61UK Energy in Brief 2017, supra note 59, at 6. Coal production was reduced due to both the 2015 closure of the last large deep mines and a decline in electricity generator demand. 62Id. Indeed, coal accounted for only 2% of total production in 2016—a record low. 63Id. The shift from coal to gas is the most striking development in the UK’s fuel mix over the past half-century. Primary electricity sources (nuclear, wind, and solar), bioenergy, and waste accounted for 16% and 9% of total production in 2016, respectively. 64Id.

The Department for Business, Energy and Industrial Strategy (BEIS) publishes quarterly statistical reports on energy trends. As of September 2018, BEIS reports that natural gas and petroleum remained the most important sources of indigenous energy production. 65Dep’t for Bus., Energy & Indus. Strategy, Energy Trends: September 2018, 5 [hereinafter Energy Trends: September 2018]. However, the share of coal was negligible; indeed, in the most recent quarter, 66 At the time of writing this Article. the outputs of (1) nuclear; (2) wind, solar and hydro; and (3) bioenergy and waste were considerably higher. Concerning electricity generation, approximately 42% of electricity was generated from gas in quarter 2 of 2018; coal’s share continued to decline, falling to 1.6%. 67Energy Trends: September 2018, supra note 65, at 48. Meanwhile, generation from low-carbon (nuclear and renewable) sources provided more than half of the generation (53.4%). 68Id. The renewable generation share was 31.7%. 69Id. at 3.

Efforts to improve the UK’s renewable energy position have been bolstered by, among other things, the ongoing work at the Drax power plant facility. 70See Jillian Ambrose, Drax Owner Plans to Be World’s First Carbon-Negative Business, Guardian (Dec. 9, 2019), https://www.theguardian.com/business/2019/dec/10/drax-owner-plans-worlds-first-carbon-negative-business. Previously a coal-fired generation facility, efforts are underway to secure a coal-free future for the plant. 71Id. Following the conversion of four of its coal units, Drax now has four biomass generating units—the remaining two coal units will soon be replaced with gas-fired power generating units. 72Drax Closer to Coal Free Future with Fourth Biomass Unit Conversion, Drax (Aug. 20, 2018), https://www.drax.com/press_release/drax-closer-coal-free-future-fourth-biomass-unit-conversion/. However, efforts to reduce carbon output will almost certainly be hampered not just by the development of the UKCS, but also by the re-commencement of the UK’s hydraulic fracking program. 73Dep’t for Bus., Energy & Indus. Strategy, Guidance on Fracking: Developing Shale Gas in the UK.

Nuclear power continues to play an important role in the UK’s low-carbon transition strategy. Around fifteen nuclear reactors generate approximately 21% of the UK’s energy. 74Nuclear Power in the United Kingdom, World Nuclear Ass. (Nov. 2018), http://www.world-nuclear.org/information-library/country-profiles/countries-t-z/united-kingdom.aspx. While half of this capacity is due to retire by 2025, the Government has worked hard to create a favorable policy for nuclear energy, with a number of several new projects now in the pipeline. The most prominent among these may be the EDF-led Hinkley Point C project. Hinkley Point C will provide 3.2GW of secure, base-load, low carbon electricity for at least sixty years. 75Id. EDF is also developing the Sizewell C project. 76Id.

In addition to its nuclear strategy, the UK is increasing its renewable electricity generation capabilities: in quarter 2 of 2018, renewables accounted for 31.7% of electricity generation—a record high. 77Energy Trends: September 2018, supra note 65, at 48. Since 2012, the UK has halved carbon emissions in the electricity generation sector; it now boasts the fourth cleanest power system in Europe. 78UK Enjoyed ‘Greenest Year for Electricity Ever’ in 2017, BBC (Dec. 28, 2017), http://www.bbc.co.uk/news/uk-42495883.

Notwithstanding the foregoing, the UK’s reliance on gas hinders its ability to meet its emission targets and provides an incentive to maintain high levels of carbon output. This remains an area where considerable progress could and should be made, particularly in light of the UK’s change of fortune with respect to for its security of supply. Given the historically significant supplies of indigenous fossil fuel resources, the UK has historically occupied a position as a net exporter of energy. However, this changed in the course of the early 2000s, with the UK became a net importer of energy. In quarter 2 of 2018, it was reported by BEIS that the UK remains a net importer of energy, with 34.1% of its energy supplied by imports. In 2017, the UK’s net import dependency was 35.8%—a decline from 2016. 79Energy Trends: September 2018, supra note 65, at 14.

In terms of the UK’s “greening” of the electricity mix, it would be remiss not to emphasize the important leadership role of Scotland in the low-carbon transition. Renewables were the single largest source of electricity generated in Scotland in 2015, commanding 42% of generation. 80 High Level Summary of Statistics Trend Last update: Thursday, December 22, 2016 Electricity Generation, Scottish Government, https://www2.gov.scot/Topics/Statistics/Browse/Business/TrenRenEnergy (last visited Feb. 13, 2020). For comparison purposes, nuclear comprised 35% and fossil fuels 22% of electricity generated. 81Id. Scotland is also a net exporter of electricity, exporting almost 30% of the total generation in 2015. 82Id. However, it is notable that Scotland is a devolved region of the UK. While energy policy remains centralized in the Westminster Government, Scotland has the power of planning rules, for example. A discussion on energy in the UK should note further that Scotland as a region has been agitating for independence in recent years: the last referendum, which resulted in a “remain” vote, was held in 2014. 83 See Philip Sim, Scottish Independence: Could a New Referendum Still Be Held?, BBC News (Jan. 31, 2020). The Scottish Government is currently focusing its efforts on getting a “good deal” for Scotland out of Brexit, but if a “good deal” cannot be struck, another referendum may be held. 84 Scott MacNab, Nicola Sturgeon: I Won’t Call a Second Scottish Independence Vote This Year, Scotsman (Nov. 27, 2018), https://www.scotsman.com/news/politics/general-election/nicola-sturgeon-i-won-t-call-a-second-scottish-independence-vote-this-year-1-4835640. Although a hypothetical scenario, it is important to note that the composition of the UK’s energy mix would likely look very different in Scotland’s absence. The rest of the UK’s progress has lagged significantly behind that of Scotland’s. Accordingly, Scotland helps to inflate the overall figures for the UK. If Scotland were to become independent, the rest of the UK would no longer be able to take Scotland’s energy statistics into account when reporting on and monitoring the UK’s progress. The UK Government must take this into consideration when formulating its energy strategy. In particular, the UK Government must ensure that each of the southern regions is harnessing to the fullest extent the low-carbon resources available to them, in order to match if not exceed the progress being made north of the border.

c. UK’s Progression Against Its Targets

The reports on the UK’s progress against its targets have been mixed. At times, the UK has appeared to lag significantly behind its European neighbors. 85 Alan Martin, The UK Still Has Some Way to Go to Hit Its 2020 Renewable Energy Target, Alphr (Feb. 1, 2018), https://www.alphr.com/energy/1008375/uk-renewable-energy-progress-2020. At other times, it would seem to be on course to hit—and potentially surpass—its targets. 86UK Set to Smash Renewable Energy Targets for 2020, Solar Daily (June 1, 2018), http://www.solardaily.com/reports/UK_set_to_smash_renewable_energy_targets_for_2020_999.html. The UK’s NREAP, published in 2010, acknowledged that efforts to integrate renewable energy resources into the fuel mix will need to accelerate if the UK is to meet its 2020 targets. 87 DECC 2010, supra note 40, at 5. In 2017, the UK saw renewable energy’s share of electricity generation jump to 29.3%. 88Digest of United Kingdom Energy Statistics, supra note 46, at 11. With the UK now comfortably producing one-quarter of its electricity from renewables, the overall target of 15% consumption from renewables seems increasingly achievable. Electricity generation from coal amounted to a mere 1.6% in quarter 2 of 2018, while natural gas remained dominant with a share of 42% (compared to 2% and 41.3% in quarter 2 of 2017, respectively). 89Energy Trends: September 2018, supra note 65, at 48. The share of renewables grew from 30.6% in quarter 2 of 2017 to 31.7% in quarter 2 of 2018. These figures are indicative of a shift away from fossil fuels for electricity generation purposes.

Concerning the UK’s energy savings target, energy consumption is on a general downward trend. 90UK National Energy Efficiency Action Plan, at 1. Indeed, primary energy consumption fell by 15% and final energy consumption by 11% in 2015 as compared to 2007. 91Id. However, the UK still needs to achieve an 18% reduction in final energy consumption by 2020 (a 20% reduction in primary energy consumption).

By 2017, UK greenhouse gas emissions were 44% below 1990 levels. 92How the UK is Progressing, supra note 48. The UK managed to meet its first carbon budget (2008–2012) and is, according to the Committee on Climate Change, likely to outperform its second (2013–2017) and third (2018–2022) budgets. However, it may struggle to meet its fourth budget, covering 2023–2027.

The role of Scotland in the UK’s achievement of its targets should be highlighted. Scotland exceeded its 2020 target to reduce greenhouse gas emissions by 42% six years early. 93 Scotland Exceeds Emissions Targets–Six Years Early, BBC (June 14, 2016), https://www.bbc.co.uk/news/uk-scotland-scotland-politics-36519506. Meanwhile, 2017 was a record year for Scotland, with 68.1% of electricity derived from renewable sources. 94 ‘Record’ Year for Renewable Electricity Generation, BBC (Mar. 29, 2018), https://www.bbc.co.uk/news/uk-scotland-scotland-business-43586438. But while Scotland’s runaway success helps to bolster the UK’s overall figures, it does mean that the UK is heavily dependent on Scotland for renewable energy resources. If Scotland were to become an independent nation in the future, then the UK’s low carbon status would take a serious hit.

2. Market and Market Players

a. Market

The electricity and gas markets in the UK are fully privatized, both at wholesale and retail levels. The electricity market in the UK is divided into two networks. On the one hand, England, Scotland, and Wales form the Great Britain (GB) system. On the other hand, Northern Ireland and the Republic of Ireland (also referred to as “Ireland”) constitute the Integrated Single Electricity Market (I-SEM).

The GB market is regulated by the Gas and Electricity Markets Authority (GEMA), which operates through the Office of Gas and Electricity Markets (Ofgem). Meanwhile, the I-SEM is regulated jointly by Northern Ireland’s Utility Regulator (UREGNI), and the Irish regulator, Commission of Regulation of Utilities (CRU). The decision-making body responsible for the governance of the SEM is the SEM Committee, which is comprised of the CRU, Utility Regulator, and an independent member.

The GB market is operated by National Grid in its guise as the Electricity System Operator. Meanwhile, the SEM is operated by the SEM Operator or SEM-O.

b. Market Players
i. Great Britain

The GB market is largely decentralized and privatized. Only the regulator, Ofgem, is a governmental body. The transmission system is divided into three regions, owned and operated by the same three entities: (1) National Grid Electricity Transmission (NGET) in England and Wales; (2) Scottish Power Transmission; and (3) Scottish Hydro Electric Transmission in Scotland (each a “Transmission System Operator” or TSO). The GB transmission system as a whole is operated by the System Operator, National Grid. Ownership of the transmission network has been certified by the Commission as fully unbundled, with the Scottish TSOs certified under Article 9(9) of Directive 2009/72/EC. 95Single Market Progress Report: United Kingdom, Eur. Comm’n, COM (2014) 634 final, at 232 (Oct. 13, 2014).

The GB market will be undergoing an important change during the period until 2030 when the GB distribution network operators (DNOs) transition into distribution system operators (DSOs). 96Open Networks Project: Overview, Energy Networks Association, http://www.energynetworks.org/electricity/futures/open-networks-project/open-networks-project-overview/ (last visited Feb. 13, 2020). This far-reaching change will see the operator adopt a more active role in the management of electricity generation and consumption. It should also enable customers to play a more active role as both producers and consumers. Presently, ownership and operation of the distribution network is divided up between a number of DNOs.

The retail electricity market is fully open to competition, with a range of domestic and non-domestic suppliers active in the market. In June 2018, there were seventy-three active domestic suppliers. 97See Number of Active Domestic Suppliers by Fuel Type (GB), Ofgem https://www.ofgem.gov.uk/data-portal/number-active-domestic-suppliers-fuel-type-gb (last updated Jan. 2020). However, the retail market is presently dominated by six large, vertically integrated suppliers known as the “Big 6.” 98Ofgem, Retail Energy Markets in 2016, at 9 (2016) [hereinafter Retail Energy Markets]. An important aspect of the GB retail market is the ownership of the big utility suppliers by international companies. EDF Energy is wholly owned by the French state-owned EDF. 99A Beginner’s Guide to the Big 6 Energy Companies, OVO Energy, https://www.ovoenergy.com/guides/energy-guides/big-six-energy-companies.html (last visited Feb. 13, 2020). Npower is presently a subsidiary of the German company, Innogy SE (itself a subsidiary of RWE). 100 Tom Käckenhoff & Philip Blenkinsop, E.ON to Tackle Npower After EU Clears Innogy Takeover, Reuters (Sep. 17, 2019), https://www.reuters.com/article/us-innogy-m-a-e-on-eu/e-on-to-tackle-npower-after-eu-clears-innogy-takeover-idUSKBN1W20S2. E.ON UK is part of the E.ON group, headquartered in Germany. 101Id. Scottish Power is a subsidiary of the Spanish giant, Iberdrola. 102A Beginner’s Guide to the Big 6 Energy Companies, supra note 99. SSE and British Gas remain British-owned companies, although British Gas is a subsidiary of the UK-owned and based Centrica. 103Id.

Notably, both E.ON and RWE underwent drastic corporate restructurings in 2016, in response to Germany’s so-called “Energiewende.” 104 Guy Chazan, Eon and RWE Pursue Radical Restructurings, Fin. Times (May 18, 2016), https://www.ft.com/content/316ce884-1cdc-11e6-a7bc-ee846770ec15. RWE hived off its renewable energy, network, and retail businesses into Innogy SE, with the-then Npower becoming a subsidiary of the latter and renamed as Npower Limited. 105 Tom Käckenhoff & Philip Blenkinsop, E.ON to Tackle Npower after EU Clears Innogy Takeover, Reuters (Sept. 17, 2019), https://www.reuters.com/article/us-innogy-m-a-e-on-eu/e-on-to-tackle-npower-after-eu-clears-innogy-takeover-idUSKBN1W20S2. RWE Generation UK PLC acquired the coal, natural gas, and oil-fired plants formerly operated by Npower. 106Id. Meanwhile, E.ON created a new subsidiary, Uniper, to keep its fossil fuel assets. 107Id. E.ON retained the renewables, distribution, and retail businesses. 108Id. There are reports that Npower will be acquired from Innogy SE by E.ON UK, as part of a planned asset swap between RWE and E.ON. 109 Adam Vaughan, Job Fears for Npower Staff, with Ownership Transferring to E.ON, Guardian (Dec. 28, 2018), https://www.theguardian.com/business/2018/dec/28/job-fears-for-npower-staff-with-ownership-transferring-to-eon.

Table 5 outlining the different market players in the GB market is provided below.

Table 5: The Different Market Players in the Great Britain Market

Regulatory Authority

Ofgem

Generators

Fossil-fuel, Renewable, Nuclear, and Aggregators.

Transmission Asset Owner

England and Wales: National Grid Electricity Transmission PLC (NGET)

 

Scotland: Scottish Power Transmission Limited (Scottish Power) and Scottish Hydro Electric Transmission PLC (Scottish Hydro)—note that Scottish Hydro now trades as Scottish & Southern Electricity Networks.

Transmission System Operator

The GB system as a whole is operated by a single System Operator, National Grid.

Three regional Transmission Operators operate within their distinct transmission areas:

 

(1) England and Wales: NGET

 

(2) Southern Scotland: Scottish Power

 

(3) Northern Scotland and the Scottish Isles: Scottish Hydro/SSE

Distribution Network Operator (groups and individual operators)

Electricity North West Limited

 

Northern Powergrid owns DNOs Northern Powergrid (Northeast) Limited and Northern Powergrid (Yorkshire) PLC

 

Scottish and Southern Energy owns DNOs Scottish Hydro Electric Power Distribution PLC and Southern Electric Power Distribution PLC

 

Scottish Power Energy Networks owns DNOs SP Distribution Ltd and SP Manweb PLC

 

UK Power Networks owns London Power Networks PLC, South Eastern Power Networks PLC, and Eastern Power Networks PLC

 

Western Power Distribution owns Western Power Distribution (East Midlands) PLC, Western Power Distribution (West Midlands) PLC, Western Power Distribution (South West) PLC, and Western Power Distribution (South Wales) PLC

System Operator

National Grid

Suppliers

The UK market is dominated by the “Big Six” largest suppliers: British Gas, EDF Energy, E.ON, Npower, Scottish Power, and SSE (holding as of Q3 2017 81% of electricity, and 80% gas supply). Note that the “Big Six” will be consolidated to the “Big Five” if the proposed asset swap between RWE and E.ON goes ahead.

 

As of June 2018 (quarter 2), some seventy-three active domestic suppliers were in operation.

Consumers

Industry, Commercial, SMEs, Residential

ii. Northern Ireland

Northern Ireland is part of the I-SEM with Ireland, so different arrangements apply.

The Northern Ireland transmission system is owned by Northern Ireland Electricity Networks (NIE Networks), a private entity, and operated by SONI. 110Our Company History, N. Ir. Electricity Networks (2019), https://www.nienetworks.co.uk/about-us/company-history. SONI is owned by the Irish TSO, EirGrid, which is an Irish state-owned entity. 111Id. NIE Networks is also the owner and operator of the distribution system. 112Id. Notably, NIE Networks is owned by the Irish state-owned utility company, the Electricity Supply Board (ESB), which acquired NIE Networks from Viridian in December 2010. 113Id. Article 9(9) of Directive 2009/72/EC has been applied to Northern Ireland. 114 Council Directive 2009/72 art. 9 O.J. (L 211) 1.

The Northern Irish retail market is open to the competition but has far fewer players. The incumbent, Power NI, dominates in the domestic sector. 115Utility Regulator, Retail Market Monitoring 3 (2018) [hereinafter Retail Market Monitoring]. Note that Viridian Group PLC is a hugely dominant player in the Northern Ireland retail market: it owns both Power NI and Energia, the supply businesses which it retained following the acquisition of NIE Networks by ESB in 2010. Accordingly, Viridian has influenced both the domestic and commercial retail markets.

A Table 6 outlining the different market players in the I-SEM may be found below.

Table 6: The Integrated Single Electricity Market Between Northern Ireland and the Republic of Ireland

 

Republic of Ireland

Northern Ireland

Regulatory Authority

CRU 

UREGNI 

Generators

Fossil fuels, Renewable, Demand-Side units, Aggregators

Fossil fuels, Renewable, Demand-Side units, Aggregators

Transmission Asset Owner

ESB

Northern Ireland Electricity (NIE) Networks Limited

Transmission System Operator

EirGrid 

SONI 

Distribution Asset Owner

ESB

NIE Networks Limited

Distribution System Operator

ESB Networks Limited

NIE Networks Limited

Market Operator

SEMO 

SEMO 

Suppliers

BEenergy, Bord Gais Energy, Electric Ireland, Energia, Go Power, Just Energy, Naturgy, Panda Power, Pinergy, Prepay Power, SSE Airtricity, Vayu 116List of Energy Suppliers, CRU, https://www.cru.ie/home/customer-care/energy/communication/ (last visited Feb. 19, 2020).

 

Electric Ireland, SSE Airtricity, Click Energy, Budget Energy, Energia, Go Power/LLC Power, Power NI, Vayu, 3T Power 117Retail Market Monitoring, supra note 115, at 5.

 

Consumers

Industry, Commercial, SMEs, Residential

Industry, Commercial, SMEs, Residential

c. Customer Profile and Consumption Trends
i. Great Britain

In terms of overall energy consumption in the GB market, transport continues to hoard the lion’s share of consumption. In 2017, transport accounted for 40% of final energy consumption. 118Dep’t for Bus., Energy & Indus. Strategy, UK Energy in Brief 2018, at 8. The domestic sector followed, representing 28%. 119Dep’t for Bus., Energy & Indus. Strategy, Energy Consumption in the UK (2018). The industry and the services sectors made up the rest with shares of 17% and 15%, respectively. 120Id.

The GB electricity market can be divided into two segments: domestic and non-domestic. The non-domestic segment includes small businesses, up to large industrial and commercial users. 121Id. As of March 2016, non-domestic users accounted for 64% of total electricity consumption, and 39% of gas. 122Id, at 5 Concerning electricity consumption, there is a general pattern of declining consumption: total consumption decreased by 1% in quarter 2 of 2018 compared to quarter 2 of 2017. 123Energy Trends: September 2018, supra note 65, at 3.

ii. Northern Ireland

The Northern Ireland electricity market can be similarly divided into domestic and non-domestic customers. In 2016, of the total customers in the electricity market in Northern Ireland, 91.7% were in the domestic sector; 8.3% were business customers. 124Utility Regulator, Retail Market Monitoring: 2016, at 6 (2017). But while the domestic sector accounted for 36.5% of consumption, the non-domestic sector accounted for the lion’s share of consumption, at 63.5%. 125Id.

In the period 2015–2016, domestic electricity consumption in Northern Ireland was around 2,925 GWh. 126Dep’t for Econ.: Northern Ireland Stat. & Res. Agency, Energy in Northern Ireland 2018, at 36 (2018). Non-domestic consumption was around 4,705 GWh. 127Id. A slight downward trend in annual electricity consumption in Northern Ireland over the period 2010–2017 has been observed. The total consumption in 2017 was 7.7% lower than 2010 levels. 128Id. at 29.

3. Transmission System

a. Great Britain

The GB system transmits high-voltage electricity through a transmission grid and has overhead lines ranging from 400kV to 275kV and below. 129Map of the UK’s Electricity Supply System Network Grid, British Bus. Energy (Apr. 2, 2016), https://britishbusinessenergy.co.uk/electricity-supply-system/.

Three entities provide the high-voltage network within their onshore transmission areas: (1) National Grid Electricity Transmission PLC (NGET) for England and Wales; 130 Kirstie Massie & Katy Norman, United Kingdom, White & Case LLP, 3, https://www.whitecase.com/sites/whitecase/files/files/download/publications/getting-deal-through-electricity-regulation-2018-united-kingdom.pdf (last visited Feb. 19, 2020). (2) Scottish Power Transmission Limited for Southern Scotland; and (3) Scottish Hydro Electric Transmission PLC for Northern Scotland and the Scottish island groups. 131See The GB Electricity Transmission Network, Ofgem, https://www.ofgem.gov.uk/electricity/transmission-networks/gb-electricity-transmission-network (last visited Feb. 19, 2020). The GB system as a whole is operated by a single System Operator, National Grid.

The UK’s transmission network is bolstered by four interconnectors: (1) England-France with “IFA” (2GW); (2) England-Netherlands with “BritNed” (1GW); (3) Northern Ireland-Scotland with “Moyle” (500 MW); and (4) Wales-Ireland with “East West” (500 MW). 132See Electricity Interconnectors, Ofgem, https://www.ofgem.gov.uk/electricity/transmission-networks/electricity-interconnectors (last visited Feb. 19, 2020). The UK has one of the lowest electricity interconnection rates among EU Members, with an interconnection rate of 6% in 2014. 133Communication from the Commission to the European Parliament and the Council: Achieving the 10% Electricity Interconnection Target, at 5, COM (2015) 82 final (Feb. 25, 2015). Several measures will have to be put in place if the UK is going to reach its target—set by the European Commission—of 10% interconnection by 2020. 134Id.

b. Northern Ireland

Northern Ireland’s transmission network consists of a series of 275kV and 110 kV lines. 135EirGrid Group, Innovative Partnerships for a Brighter Tomorrow 15 (2017). In Northern Ireland, the TSO is the System Operator for Northern Ireland Limited (SONI). 136See generally id. SONI is a subsidiary of EirGrid, which is the TSO in the Republic of Ireland. 137Id. at 1.

The electricity market operates as a single wholesale market across the whole of the island of Ireland; accordingly, the Northern Irish grid is physically connected to the Irish grid via two interconnectors. A single 275 kV double circuit interconnector cable connects Northern Ireland with Ireland between Tandragee (Northern Ireland) and Louth (Ireland) substations. 138Id. at 15. Meanwhile, two lower-capacity 110 kV cables connect at Letterkenny in Co. Donegal and Corraclassy in Co. Cavan. 139See Transmission System 400, 275, 220 and 100kV September 2016, EirGrid Group (2016), http://www.eirgridgroup.com/site-files/library/EirGrid/EirGrid-Group-Transmission-System-Geographic-Map-Sept-2016.pdf. These interconnections facilitate the functioning of the I-SEM. Two interconnectors connect the I-SEM with the GB market. 140See EirGrid Group, supra note 6–9. The Moyle Interconnector links Northern Ireland to Scotland. 141See Interconnection, SONI, http://www.soni.ltd.uk/customer-and-industry/interconnection/ (last visited Feb. 19, 2020). The I-SEM is also connected to GB via the East-West Interconnector, which connects Dublin, Ireland to Wales. 142Id.

In Northern Ireland, small scale generators (less than 5 MW) connect exclusively to the distribution network. 143NIE Networks, Distribution Generation Application and Offer Process Statement 1 (2018). Larger generators may connect to either distribution or transmission, but the largest generators of 110kV or above must apply to the TSO for connection to the transmission network. 144Id. The application procedure varies depending upon multiple factors, including size. Figure 7 maps out the UK’s transmission system, by the operator.

 

Figure 7: Transmission Network in UK 145Find Your Gas & Electricity Distributors, Selectra (Aug. 26, 2019), https://selectra.co.uk/energy/guides/distribution.

Insert fig7

4. Distribution System

The distribution network for the UK is managed by a far wider variety of operators than the transmission network. For the distribution network, the GB system is divided into eight regions. Northern Ireland is a separate region. Figure 8 offers a visualization of the current arrangements. Note that the Republic of Ireland is included in Figure 8 below but should be ignored for this Section.

 

 

Figure 8: Distribution Network in UK 146Id.

Insert fig8

C. Governance System

1. Energy Strategy

a. Great Britain

Britain’s energy strategy is informed by the Climate Change Act 2008, under which the UK committed to reducing GHG emissions by 80% by 2050, compared to 1990 levels. 147Dep’t for Bus., Energy & Indus. Strategy, The Clean Growth Strategy: Leading the Way to a Low Carbon Future 5 (2017) [hereinafter The Clean Growth Strategy]. A pathway for the achievement of this target was established by the Clean Growth Strategy (CGS), published in October 2017. 148See generally id. The key policies and proposals evident in the CGS are as follows:

Public and private investment plays a prominent role in the CGS. The Government has allocated £2.5 billion of investment to low carbon innovation for the period 2015–2021, with the bulk of funding targeted at the transport sector (33%). 150See id. at 17. The concept of cross-collaboration with business, civil society, and the public pervades the CGS. Thus, it is made clear that the focus of the CGS is on creating a supportive, enabling environment for investment.

On the regulatory side of the energy strategy, Ofgem has published its blueprint, setting out a pathway for regulation in the coming years. 151Ofgem, Our Strategy for Regulating the Future Energy System, (2017). It focuses on regulatory arrangements in the following areas:

b. Northern Ireland

Energy policy is fully devolved to Northern Ireland. The NI Executive published its Strategic Energy Framework (SEF) for the period 2010–2020 in September 2010. 153See Dep’t of Enterprise, Trade and Inv., Energy: A Strategic Framework for Northern Ireland (2010). The SEF provides a clear signal of the Executive’s priorities for the energy sector. Its central aim is to create a more secure and sustainable energy system for Northern Ireland, built around competitive markets; a secure, efficient, and sustainable energy supply; and robust infrastructure. 154See id.

The NI Executive published its Report on the Draft Programme for Government (PfG), containing fourteen strategic outcomes to set a clear agenda for the NI Executive, in December 2016. 155 Northern Ireland Assembly: Comm. for the Exec. Office, Report on the Executive’s Draft Program for Government 2016-21, at 6 (2016). The draft PfG Framework includes a number of references to energy, with a specific ambition for a secure, sustainable, and cost-efficient energy supply. 156 Id. at 19. But with the collapse of the NI Executive in January 2017, Northern Ireland has been thrown into flux. Clearly, a new PfG will be necessary once power-sharing is reinstated. But given the continued political impasse, it is unclear what progress will be made over the coming months. Naturally, this will have serious implications for Northern Ireland’s energy strategy, and progress thereon.

A new PfG will inevitably be influenced by the outcomes of the UK’s Brexit negotiations. Presently, the UK is working hard to ensure that the I-SEM continues to function unimpeded post Brexit, but this would likely result in Northern Ireland agreeing to certain rules relating to wholesale markets while Great Britain withdraws from them. 157See I-SEM Will Continue in No-Deal Brexit, Argus Media (Mar. 14, 2019), https://www.argusmedia.com/en/news/1866067-isem-will-continue-in-nodeal-brexit. This will pose further problems from a power-sharing perspective, as the Democratic Unionist Party (DUP) continues to resist suggestions that Northern Ireland may need, in some respects, to have different arrangements from Great Britain. 158See Brexit: EU and UK Reach Deal but DUP Refuses Support, BBC News (Oct. 17, 2019), https://www.bbc.com/news/uk-politics-50079385.

2. Integration of Governance and Energy Strategy

In the UK, and particularly so within GB, a pro-market mentality dominates energy discourse. While energy governance and strategy are still politicized to the extent that it remains dictated by the government and the governmental regulator, energy policy exists within a “pro-market” framework. The UK’s tendency towards energy marketization was apparent in the merger of the Department of Energy and Climate Change with the Department for Business, Innovation and Skills to form the Department for Business, Energy and Industrial Strategy. Northern Ireland, meanwhile, has a separate Department for Energy, with the I-SEM regulated by a state departmental body, and operated and managed by state-owned companies. In GB, notably, the market is regulated by a governmental agency, but is otherwise privatized.

Energy security and climate change mitigation measures play pivotal roles in the UK-wide energy governance sphere, as they do in the UK-wide strategic framework for a low-carbon future. But there do appear to be inconsistencies. The CGS promotes investment and innovation as key to the achievement of its low carbon targets, but it is unclear the extent to which this message of an enabling investment environment has reached, and persuaded, private investors. Green energy investment in wind, solar, and other renewable energy sources actually halved in the course of recent years, with a 56% decline reported in 2017. 159 Adam Vaughan, UK Green Energy Investment Halves After Policy Changes, Guardian (Jan. 16, 2018), https://www.theguardian.com/business/2018/jan/16/uk-green-energy-investment-plunges-after-policy-changes. Mixed messages regarding the funding available for green energy projects will tend to dissuade investment, and recent cuts to subsidies, 160 James Tapper, Green Energy Feels the Heat as Subsidies go to Fossil Fuels, Guardian (June 23, 2018), https://www.theguardian.com/environment/2018/jun/23/green-energy-subsidies-community-projects-fossil-fuels. along with the commencement of the UK’s fracking program, 161 Adam Vaughan, Fast-Track Fracking Plan by the Government Prompts Criticism, Guardian (May 17, 2018), https://www.theguardian.com/business/2018/may/17/fast-track-fracking-plan-by-uk-government-prompts-criticism. will not assist the UK in establishing the sort of coherent, predictable investment climate that tends to attract private investment. Moreover, at the same time as the cuts to solar PV subsidies, fossil fuel generators were receiving around £3 billion through Capacity Market Auctions in 2017. 162 Phil MacDonald, Subsidies to UK Coal Continue Despite Phase-Out Pledge, Sandbag: Smarter Climate Policy (Sept. 28, 2017), https://sandbag.org.uk/2017/09/28/7807/. The GB Capacity Market has now been suspended, following a ruling of the European Court and pending a full investigation by the Commission. 163 Case T-793/14, Tempus Energy Ltd. and Tempus Energy Tech. Ltd. v. European Comm’n supported by UK, 2013 E.C.R. 790. It is important, however, not to misidentify correlation as causation. The downturn in private investment could feasibly stem, at least in part, from the increased business circumspection stemming from the Brexit negotiations.

The aforementioned cuts to subsidies for solar panels, and a “hostile planning approach” to new wind turbine applications have also been blamed for a decline in domestic generation. 164 Tapper, supra note 160. Notwithstanding the foregoing, however, some industry analysts now believe that onshore wind and solar could be viable without subsidies by 2020, due to falling costs and advances in battery technology. 165 Adam Vaughan, Subsidy-Free Renewable Energy Projects Set to Soar in UK, Analysts Say, Guardian (Mar. 20, 2018), https://www.theguardian.com/business/2018/mar/20/uk-subsidy-free-renewable-energy-projects-set-soar-aurora-energy-research-analysts. While there may be a number of “lost years” until the point where these technologies are again considered viable without subsidies, it is possible that subsequent years will see these technologies re-establish themselves on the market.

In summary, while the UK’s central energy strategy calls for a transition to a low-carbon energy market, the government’s tendency to appeal to the incumbent market interests means that the implementation of its strategy can appear to be biased towards those interests, at the possible expense of the low-carbon transition. This being said, the UK can boast significant progress in growing its economy while reducing its emissions. Since 1990, its emissions have been cut by over 40%, 1662016 UK Provisional Greenhouse Gas Emissions, Nat’l Stat. (Mar. 30, 2017), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/604327/2016_Provisional_emissions_statistics_one_page_summary.pdf. while the economy has grown by two-thirds. 167The Clean Growth Strategy, supra note 147, at 5. In quarter 2 of 2018, almost 54% of the UK’s electricity came from low-carbon sources. 168Energy Trends: September 2018, supra note 65, at 3. Based on these figures alone, the focus of UK energy strategy and governance, on encouraging investment and innovation in an enabling market environment, appears to be capable of delivering results. However, if these results are to be fully realized, it will be important for the UK’s low-carbon policy strategy to be implemented in a coherent and consistent manner.

If the UK wishes to continue to lead in green growth, it must continue to attract investment during and after Brexit. As previously noted, it may be that the investment downturn which has been observed in the past couple years has been a response to the uncertainty surrounding the Brexit negotiations. But if this is so, then the UK may need to rethink its strategy. The clearer and more coherent its strategy is in times of uncertainty, the more confident businesses will be in investing.

The future energy strategy of the UK will need to be informed to a large extent by the outcomes of the Brexit process; the energy governance structure will also need to respond to whatever new paradigm emerges. Notably, the CGS does not make mention of Brexit. 169See generally The Clean Growth Strategy, supra note 147. This is unavoidable, as the Brexit vote was not until 2016. But this does mean that the CGS will need updating in the very near future. One area that requires clarification is exactly how close the ties between the UK and the EU will be after Brexit, whether it will still be part of the EU Internal Energy Market (IEM), or whether it will withdraw. The Political Declaration accompanying the UK-EU Withdrawal Agreement fell short of seeking continuing participation in the IEM, but did include at Clauses 66 and 67 a high-level commitment to cooperate on the supply of energy so as to ensure security of supply and trade over interconnectors. 170 Political Declaration Setting Out the Framework for the Future Relationship Between the European Union and the United Kingdom, ¶¶ 66–67. That being said, it is likely that continued access to the IEM will play a part in the UK’s strategy, not least because of the benefits of coordinated energy trading. However, if full membership was politically unsatisfactory, then this would complicate matters for Northern Ireland. Northern Ireland, of course, participates in the I-SEM with Ireland. To the extent this must continue after Brexit, then certain EU laws would have to continue to apply to Northern Ireland to allow for the continuation of the I-SEM. It appears to be the UK’s wish that the I-SEM continue after Brexit; 171Dep’t for Bus., Energy & Indus. Strategy, Leaving the EU: Negotiation Priorities for Energy and Climate Change Policy, 2016-17, HC 909, at 19 (UK) [hereinafter Leaving the EU]. for that to happen unimpeded, Northern Ireland will have to remain part of the IEM. However, if the UK made the decision to withdraw from the IEM, then observers may then witness a decoupling of the NI and GB markets. It remains to be seen how politically satisfactory such a situation would be.

The UK’s departure from the EU could also have serious implications for future climate policy. Notably, Clause 78 of the Political Declaration states: “The future relationship should reaffirm the Parties’ commitments to international agreements to tackle climate change, including those which implement the United Nations Framework Conventions on Climate Change (UNFCCC), such as the Paris Agreement.” 172 Political Declaration Setting Out the Framework for the Future Relationship Between the European Union and the United Kingdom, ¶ 78. The fact that the UK has bid to hold the 2020 Conference of the Parties (COP) UNFCCC suggests that it will strive to maintain its position as a world leader on climate change and honor its Paris commitments. Nevertheless, it is possible that the UK could backslide on the EU’s renewables and energy efficiency targets after Brexit. If it were to retreat from the EU’s targets, then the implications would likely be realized only in respect of the targets for 2030 and 2050, as the vast majority of the projects needed to hit the 2020 renewables targets will already have been approved. However, it is important to note that the UK has imposed on itself even more stringent requirements for carbon emissions pursuant to its Climate Change Act 2008 (with a target to reduce GHG emissions by at least 80% of 1990 levels by 2050). The UK has met its first two budgets and is on track to meet the third; however, the CCC cautions that more action is required to meet subsequent budgets. 173Ten Years of the Climate Change Act, Comm. on Climate Change, https://www.theccc.org.uk/our-impact/ten-years-of-the-climate-change-act/ (last visited Feb. 19, 2020). Nevertheless, the UK has been one of the EU’s worst offenders with regard to flouting environmental laws; 174 Jennifer Rankin, Activists Demand UK Environment Watchdog in Brexit Trade Deal, Guardian (Nov. 26, 2018), https://www.theguardian.com/politics/2018/nov/26/post-brexit-trade-deal-must-guarantee-uk-environment-watchdog-green-groups. while a post-Brexit “green watchdog” has become moot, under current plans it will not have any powers related to climate change. 175 James Tapper, UK’s Green Watchdog Will Be Powerless Over Climate Change Post-Brexit, Observer (Sept. 2, 2018), https://www.theguardian.com/environment/2018/sep/02/green-watchdog-powerless-climate-change-post-brexit. Who will hold the UK government to account on climate change matters following its EU departure is, therefore, unknown.

Accordingly, it is conceivable that a considerable amount of re-thinking will be required with respect to the UK’s energy strategy in the coming months and years. But it will only be possible to know exactly how much re-thinking or re-design will actually be necessary once the dust has settled on the Brexit arrangements. It may be that GB chooses to withdraw from the IEM. If GB were to withdraw but Northern Ireland were to remain, then Northern Ireland and GB would likely become decoupled. In the event, however, that both Northern Ireland and GB stay within the IEM—as seems probable, given the efficiency costs of a GB exit—their energy policies would remain influenced by European IEM developments.

With regard to Northern Ireland, while energy policy is now fully devolved to the NI Executive, the complex interconnected nature of energy policy, markets, systems, and infrastructure means that the UK government has always played an important role, directly and indirectly, in shaping Northern Ireland policy. Helpfully, the UK government recognizes the influence it has over Northern Ireland’s energy strategy. A report by the House of Commons Northern Ireland Affairs Committee, published in April 2017, provided a number of examples regarding the UK’s influence. 176 Northern Ireland Affairs Comm., Electricity Sector in Ireland, 2016-17, HC 51, at 6 (2017). One example cited was the UK’s Renewable Obligation (RO) scheme, introduced in 2002. 177Id. The RO scheme was withdrawn in 2011. 178Id. It was replaced with the Contracts for Difference (CfD) scheme, in which the subsidy varies according to the wholesale price. 179Id. Northern Ireland was compelled to withdraw its own Renewables Obligation scheme in response, to avoid the cost of subsidies increasing considerably. 180See id. at 51. Another example is the Carbon Price Floor, introduced in 2013. The Carbon Price Floor scheme introduced the obligation for industries to provide a top-up, payable if the market price for carbon fell below a certain level. 181See id. at 8–9. The intention of the scheme was to stimulate investment in low-carbon infrastructure but, when in March 2014 the UK government announced a cap at £18 per tonne for the period from 2016/17 to 2019/20, Northern Ireland was compelled to seek an exemption to avoid SEM distortions. 182See id. Despite achieving this exemption, the Carbon Price Floor, nevertheless, had an indirect effect on Northern Ireland’s electricity market, through reduced imports at the Moyle Interconnector. 183See id. at 8.

Given the UK’s heady influence over Northern Ireland energy strategy, it will be important for the NI Executive and HM Government in Westminster to continue to liaise closely in the coming months as Brexit negotiations continue. The regulators will also need to play an important role, so collaboration between Ofgem and UREGNI should be championed. Much will depend on the outcome of the current negotiations, but it is feasible that Northern Ireland will seek to gain more independence from the UK on energy policy and related matters in the coming years—particularly if the UK’s exit from the EU puts an intolerable strain on the functioning of the I-SEM.

D. Regulatory Framework and Energy Security

1. Regulatory Framework

a. Legislation Pertaining to the Electricity Market

The legal framework governing the electricity markets in England, Scotland, and Wales arises from a string of regulations including, but not limited to, the Electricity Act 1989 (as amended and supplemented); the Utilities Act 2000; the Energy Acts 2004, 2008, 2010, 2011, 2013, and 2016; the Climate Change Act 2008; the Competition Act 1998; the Enterprise and Regulatory Reform Act 2013; and the Infrastructure Act 2015. 184Electricity Regulation: United Kingdom, Getting the Deal Through (Oct. 2019), https://gettingthedealthrough.com/area/12/jurisdiction/22/electricity-regulation-2020-united-kingdom/.

Notably, the Energy Act 2013, which amended the Electricity Act 1989, introduced the Electricity Market Reform (EMR). 185Id. The EMR instigated two key changes, the CfD scheme and the capacity market. Both will be discussed below. In addition, the EMR also launched the emissions performance standard (EPS) and the Carbon Price Floor. The key provisions of the Energy Act 2016, which amended the Electricity Act 1989, provide inter alia for the closure of the RO scheme for onshore wind generators. 186Id. The CfD scheme replaces the RO scheme. 187Northern Ireland Affairs Comm., supra note 176, at 6.

The key legislation in respect of the regulatory architecture of Northern Ireland’s electricity sector includes the Electricity (Northern Ireland) Order 1992; the Energy (Northern Ireland) Order 2003; and the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007. 188Electricity Regulation: Ireland, supra note 184.

b. Regulatory Framework and the Smart Grid
i. Integration of Renewable Energy Sources

The Electricity Act 1989 (as amended and supplemented) sets out a licensing regime which is regulated by the GEMA. A license is mandatory for the following activities: generation; participation in transmission; distribution; supply; participation in the operation of an electricity interconnector; and the provision of smart metering services. 189 Electricity Act 1989, c. 29 (Eng.). License applicants need to submit a written application and pay the relevant fee to the regulator, Ofgem. Certain actors, such as small-scale generators, distributors, and suppliers, may be exempted from holding a license insofar as they meet particular requirements. 190Id. Licenses are subject to different types of conditions including standard conditions (generally applicable to all licensees), amended standard conditions, and special conditions (specific to the licensee at issue). In addition to these requirements, licensees must observe relevant industry codes and standards, which are usually outlined in the standard conditions of their individual license. 191 Massie & Norman, supra note 130.

The main planning acts which relate to England are the Town and Country Planning Act 1990; the Planning and Compulsory Purchase Act 2004; the Planning Act 2008 and the Localism Act 2011. 192See Winter et al., Comparison of the Planning Systems in the Four UK Countries, House of Commons Library 4 (Jan. 20, 2016), https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7459. The Wales framework is broadly similar to that of England, with the 1990 Act, 2004 Act, 2008 Act, and 2011 Act supplemented by the Planning (Wales) Act 2015. 193Id. at 5. Pursuant to the Electricity Act 1989, the construction or extension of an onshore generation facility (with the exception of wind generation facilities) located in England and Wales with a capacity exceeding 50 MW currently requires the consent from the Secretary of State for Business, Energy and Industrial Strategy under Section 36 of the 1989 Act (this will change come 2019—as discussed below). 194 Electricity Act 1989, c. 29 (Eng.). Onshore generation facilities are usually classified as Nationally Significant Infrastructure Projects (NSIP) under the Planning Act 2008. 195 Planning Act 2008, c. 29 (Eng.). The Secretary of State for Business, Energy and Industrial Strategy should sanction NSIPs through a Development Consent Order. However, the Energy Act 2016, coupled with the Infrastructure Planning (Onshore Wind Generating Stations) Order 2016, withdrew onshore wind farms featuring a capacity surpassing 50 MW from the NSIP regime. 196 Specifically, the Onshore Wind Generating Stations (Exemption) (England and Wales) Order 2016 (S.I. 2016/21) as amended by the Onshore Wind Generating Stations (Exemption) (England and Wales) (Amendment) Order 2016 (S.I. 2016/450) also removed the requirement for a Section 36 consent for onshore wind generation. The construction of non-wind onshore generation facilities in England with a capacity under 50 MW, may require approval from the relevant local planning authority in accordance with the Town and Country Planning Act 1990. 197 Massie & Norman, supra note 130.

In Wales, most parts of the planning system are devolved. Onshore generation facilities with a capacity ranging from 10 to 50 MW are treated as Developments of National Significance and are decided by Welsh Ministers. 198 Planning (Wales) Act 2015, c. 19, § 62D. In April 2019, the Wales Act 2017 further consented powers over energy generating stations with a capacity of up to and including 350 MW onshore and in Welsh waters will be devolved to Wales. 199See Elfyn Henderson, A New Infrastructure Consenting Process For Wales, In Brief: Senedd Research, Nat’l Assembly for Wales (June 7, 2018).  

In Scotland, development consent functions are fully devolved. 200See Town and County Planning (Scotland) Act 1997, as amended by the Planning etc. (Scotland) Act 2006. In Scotland, applications are considered by the Scottish Ministers for electricity generating facilities in excess of 50 MW, or for overhead power lines and associated infrastructure, as well as large gas and oil pipelines. 201Energy Infrastructure, Scottish Gov’t, https://www2.gov.scot/Topics/Business-Industry/Energy/Infrastructure/Energy-Consents (last visited Feb. 20, 2020). Applications cover new projects and modifications to existing infrastructure. Below these limits, applications are made to local authorities. Notably, applications for marine energy are made to Marine Scotland. 202Id.

In Northern Ireland, as in Scotland, development consent functions are fully devolved. In April 2015, a two-tier planning system came into force under the Planning Act (Northern Ireland) 2011. Each council is now the Local Planning Authority for its district council area. The Department of Environment (now the Department for Infrastructure) retains authority for regionally significant applications.

With regard to wind generation in particular, local authorities have the ability to determine planning applications for onshore wind generation facilities of all capacities. In England, Wales, and Scotland small-scale domestic turbines may be considered “permitted developments” and thus not need planning permission; however, this is subject to strict conditions. In both Scotland 203 The Town and Country Planning (General Permitted Development) (Domestic Microgeneration) (Scotland) Amendment Order 2010 (ASP 27), § 2(5)(a). and Wales, 204Planning Permission: Wind Turbines, Welsh Gov’t, https://beta.gov.wales/planning-permission-wind-turbines (last visited Feb. 20, 2020). building-mounted developments require planning permission. In England, the rules have been relaxed, building-mounted developments may be permitted provided they comply with specific criteria. 205 The Town and Country Planning (General Permitted Development) (Amendment) (England) Order 2011, c. 2, § E.2. In Northern Ireland, wind turbines and wind farms always require planning permission. 206 Renewable Energy: Wind Farms, Portal Planning, https://www.planningni.gov.uk/index/advice/advice_apply/advice_renewable_energy/renewable_wind_farms.htm (last visited Feb. 20, 2020).

Thus, the UK has a clear regulatory framework for planning applications for renewable energy developments. Yet, planning applications for new onshore wind developments have plummeted by 94% since the introduction of new policies in 2015. 207 Josh Gabbatiss, A ‘Hostile Environment’ for Renewables: Why Has UK Clean Energy Investment Plummeted?, Independent (May 19, 2018), https://www.independent.co.uk/environment/uk-renewable-energy-investment-targets-wind-solar-power-onshore-a8358511.html. These policies sought to bring the planning application closer to local communities by allowing local authorities the final say on locations for onshore wind development. This occurred alongside a transfer of powers from the BEIS to the Ministry of Housing, Communities and Local Government. Unfortunately, no cost-benefit analysis was undertaken, and the result has been a striking decline in applications. Around the same time, the government withdrew its support schemes for solar; private investment has since declined significantly on solar technologies.

With regard to connection arrangements, in both England and Wales, generation facilities with a capacity equal or superior to 100 MW may be connected to the transmission network; smaller facilities are directly connected to the distribution network. 208 Massie & Norman, supra note 130. In Scotland, smaller generation facilities may also be directly connected to the transmission grid. 209Id. Meanwhile, in Northern Ireland, small scale generation facilities (less than 5 MW) connect exclusively to the distribution network. 210Distribution Generation Application and Offer Process Statement, NIE Networks 1 (2008). Larger generators may connect to either distribution or transmission, but the largest generators of 110kV or above must apply to the TSO to connect to the transmission network. 211Id. The application procedure is dependent upon various factors, including size.

ii. Incentive Schemes (Feed-In Tariffs and Others)

In 2002, the RO scheme became effective in England, Wales, and Scotland, whereas the RO scheme entered into effect in 2005 in Northern Ireland. 212About the RO, OFGEM, https://www.ofgem.gov.uk/environmental-programmes/ro/about-ro (last visited Oct. 12, 2019). It required all UK electricity suppliers to generate an increasing proportion of electricity from renewable energy sources. 213Id. The RO scheme closed to all new generating capacity on March 31, 2017. 214RO Closure, OFGEM, https://www.ofgem.gov.uk/environmental-programmes/ro/about-ro/ro-closure (last visited Feb. 20, 2020). However, the closure did not affect capacity with an accreditation date on or before the closure date. 215Id.

The Energy Act 2013 instigated the Electricity Market Reform (EMR). 216 Massie & Norman, supra note 130; see also Electricity Market Reform: Contracts for Difference, Dep’t for Bus., Energy & Indus. Strategy, https://www.gov.uk/government/collections/electricity-market-reform-contracts-for-difference (last updated Feb. 8, 2017). The EMR introduced the CfD scheme to promote low-carbon electricity generation and encourage investment in electricity from renewables. 217See generally Electricity Market Reform: Contracts for Difference, supra note 216. The CfD scheme replaced the old RO scheme. 218 Catapult Energy Systems, GB Energy Industry, ch. 6 (2019). No decision has yet been taken by the Northern Ireland Executive regarding Northern Ireland’s participation in a UK-wide CfD scheme. 219Dep’t for Bus., Energy & Indus. Strategy, Contracts for Difference and Capacity Market Scheme Update 2017, 10 (2017).

While CfDs are a useful mechanism to incentivize investment in renewables, 220Id. at 4 (the second CfD round saw sixteen contracts being signed in connection with ten projects; these will provide over 3GW of new renewable generation capacity from 2021/22). BEIS has been criticized for effectively “locking out” mature renewable technologies such as solar and onshore wind 221 Priyanka Shrestha, Remote Island Wind Projects Able to Compete in Renewable Auction, Energy Live News (June 11, 2018), https://www.energylivenews.com/2018/06/11/remote-island-wind-projects-able-to-compete-in-renewable-auction/ (other than wind turbine projects on “remote islands,” which are now accepted following a relaxation of the rules). from the scheme. 222 Liam Stoker, Let Solar Back Into CfDs, Energy UK Urges Government, Solar Power Portal (May 24, 2018), https://www.solarpowerportal.co.uk/news/let_solar_back_into_cfds_energy_uk_urges_government. The third CfD allocation round opens in May 2019, but only less-established renewable technologies such as offshore wind, geothermal, and wave and tidal stream will be eligible. 223Frequently Asked Questions, Contracts for Difference (CfD), https://www.cfdallocationround.uk/faqs (last visited Oct. 12, 2019). The Committee on Climate Change and the National Infrastructure Commission have been among the organizations calling for a rethink, and the BEIS has now indicated that “further refinements” may follow. 224Delivering Clean Growth: Progress Against Meeting Our Carbon Budgets–The Government Response to the Committee on Climate Change, HM Gov’t (Oct. 2018).

The EMR also introduced the GB capacity market (“CM”). 225 Massie & Norman, supra note 130; see also Capacity Market (CM) Rules, OFGEM, https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules (last visited Oct. 12, 2019). The CM is covered in further detail in Section 6. Northern Ireland’s capacity market is different from that of GB’s, Northern Ireland’s capacity market is operated by the SEM-O as part of the I-SEM with the Republic of Ireland. 226See Thomas Muinzer, Electricity Bills Could Rise if Brexit Threatens Ireland’s Unique Energy Agreement, Irish Examiner (Nov. 30, 2018), https://www.irishexaminer.com/breakingnews/views/analysis/electricity-bills-could-rise-if-brexit-threatens-irelands-unique-energy-agreement-889072.html.

In addition to CfDs, the UK has mobilized supplementary policies such as the Feed-In Tariff (FIT) scheme, established in 2010, to generate electricity based on alternative energy sources. 227Feed-in Tariffs (FIT), OFGEM, https://www.ofgem.gov.uk/environmental-programmes/fit (last visited Oct. 12, 2019). Payments under the FIT scheme are made by energy suppliers on a quarterly basis for the electricity generated and exported by eligible installations. 228See Feed-in-Tariffs, Ovo Energy, https://www.ovoenergy.com/help/feed-in-tariffs (last visited Feb. 20, 2020). The current FIT scheme notwithstanding, some analysts suggest that solar PV and onshore wind may soon become subsidy-free. 229 Vaughan, supra note 165. The FIT scheme does not apply to Northern Ireland. 230 Georgios Maroulis, Feed-in-Tariff, RES Legal, http://www.res-legal.eu/search-by-country/united-kingdom/single/s/res-e/t/promotion/aid/feed-in-tariff-5/lastp/203/ (Jan. 5, 2019).

Notably, the FIT scheme will come to an end in April 2019. 231About the FIT Scheme, OFGEM, https://www.ofgem.gov.uk/environmental-programmes/fit/about-fit-scheme (last visited Oct. 12, 2019). The export tariff, which offers a guaranteed price for all unused solar electricity, will also end; a replacement is expected but in the interim households will in effect be giving away surplus power. 232 Adam Vaughan, Solar Households Expected to Give Away Power to Energy Firms, Guardian (Dec. 18, 2018), https://www.theguardian.com/business/2018/dec/18/solar-power-energy-firms-government. This decision forms a type of “double whammy” for solar households because in the aftermath, Ofgem announced the results of its Access and Forward-Looking Charging Review and the launch of its Significant Code Review in which there will be considerable changes to existing access arrangements. 233Electricity Network Access and Forward-Looking Charging Review–Significant Code Review Launch and Wider Decision, OFGEM, https://www.ofgem.gov.uk/publications-and-updates/electricity-network-access-and-forward-looking-charging-review-significant-code-review-launch-and-wider-decision (last visited Oct. 12, 2019). Critics of the proposals have argued that these undermine low carbon efforts by not putting decarbonization at the center of the review. There are now fears that the review may result in higher bills for households generating solar energy from panels. 234 Adam Vaughan, Energy Shakeup Could Cut Bills by £45 a Year, Guardian (Dec. 18, 2018, 4:47 AM), https://www.theguardian.com/money/2018/dec/18/energy-bills-ofgem-national-grid.

Since April 2013, the Carbon Price Floor has applied as tax to fossil fuels used for energy generation. 235 David Hirst, Carbon Price Floor (CPF) and the Price Support Mechanism, House of Commons Library 3 (Jan. 8, 2018), https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN05927. Renewable electricity is exempt from paying this tax. 236Res Legal, Renewable Energy Policy Database and Support—National Profile: United Kingdom 7 (2015). Northern Ireland secured an exemption from the Carbon Price Floor, following concerns about the scheme’s incompatibility with the SEM (now I-SEM). 237Committee on Climate Change, Reducing Emissions in Northern Ireland 30 (2019).

iii. Heating and Cooling

The Renewable Heat Incentive (RHI) is the main source for funding renewable heat in the UK. 238Factsheet: The Renewable Heat Incentive Domestic or Non-Domestic?, OFGEM, https://www.ofgem.gov.uk/sites/default/files/docs/drhi_factsheet_therhidomornondom_v2_0_mar_2016_web.pdf (last visited Oct. 12, 2019). The RHI supports eligible installations with a fixed amount per kWth produced. The scheme consists of two parts—Domestic and Non-Domestic RHI. While the Non-Domestic RHI applies to installations in commercial, public, or industrial premises, the Domestic RHI is open to homeowners, private landlords, social landlords, and self-builders. The government has recently reaffirmed its commitment to the scheme, with further reforms likely. 239Dep’t for Bus., Energy & Indus. Strategy, The Renewable Heat Incentive: A Reformed Scheme, 5 (2016). Northern Ireland had a similar RHI scheme, administered by the Department for the Economy, but this scheme was suspended to new applicants in February 2016. 240See Need-to-Know Guide: Renewable Heat Incentive (RHI) Scheme, BBC News (Nov. 7, 2017), https://www.bbc.com/news/uk-northern-ireland-38307628. Consultations into the future of the Non-Domestic NI-RHI are ongoing, 241The Future of the Northern Ireland Non-Domestic Renewable Heat Incentive Scheme, Dep’t of the Econ. (Jan. 31, 2019), https://www.economy-ni.gov.uk/consultations/future-northern-ireland-non-domestic-renewable-heat-incentive-scheme. as is an inquiry into the operation and financial implications of the (suspended) NI Non-Domestic RHI scheme. 242Renewable Heat Incentive Inquiry: Terms of Reference, Dep’t of Fin. (Jan. 27, 2017), https://www.rhiinquiry.org/sites/rhiinquiry.org/files/media-files/rhi-inquiry-terms-of-reference.pdf.

Under the Green Deal scheme, 243Green Deal: Energy Saving for Your Home, GOV.UK, https://www.gov.uk/green-deal-energy-saving-measures (last visited Oct. 12, 2019). home and business owners could obtain a loan for certain energy-efficiency measures specified in the Green Deal (Qualifying Energy Improvements) Order 2012 and subsequently pay off the loan through their energy bill. The Green Deal applied to England, Wales, and Scotland. Originally closed in 2015 when the Government withdrew its funding, Green Deal loans reopened in 2017 for new applications. 244See The Green Deal, Which?, https://www.which.co.uk/reviews/home-grants/article/home-grants/the-green-deal (last visited Feb. 20, 2020). It is now backed by private investors. 245Id. A review of the Green Deal framework is ongoing. 246See generally Dep’t for Bus., Energy & Indus. Strategy, Call for Evidence—Green Deal Framework. Grants are also available in Northern Ireland via the Northern Ireland Sustainable Energy Programme. 247Update on Northern Ireland Sustainable Energy Programme, Util. Regulator (June 4, 2018), https://www.uregni.gov.uk/news-centre/update-northern-ireland-sustainable-energy-programme-0. A further series of energy efficiency and heating grants are available via affordable heating schemes, in England and the devolved regions.

An Enhanced Capital Allowance scheme encourages businesses to invest in energy efficient plant and machinery. 248Energy Technology List (ETL), GOV.UK, https://www.gov.uk/guidance/energy-technology-list (last updated Mar. 6, 2019). Businesses can set up to 100% of the cost of assets against taxable profits in the financial year the purchase was made. The scheme also applies in Northern Ireland. 249See Enhanced Capital Allowances in Enterprise Zones, Tax J., https://www.taxjournal.com/articles/enhanced-capital-allowances-enterprise-zones-20072016 (last visited Feb. 20, 2020).

iv. Transport

The Renewable Transport Fuel Obligation (RTFO) scheme established a quota system for biofuels. 250Renewable Transport Fuel Obligation, Dep’t for Transport (Nov. 5, 2012), https://www.gov.uk/guidance/renewable-transport-fuels-obligation. This has applied since 2007. 251Id. Under the RTFO, fuel suppliers for transport and non-road-mobile machinery are obliged to satisfy a specified quota number of biofuels in the total supplied fuel. 252See id. A certification system provides for proof of compliance.

The maximum grant now available for cars in the UK is £3,500. 253Low-Emission Vehicles Eligible for a Plug-in Grant, GOV.UK, https://www.gov.uk/plug-in-car-van-grants (last visited Oct. 12, 2019). The plug-in car grant was cut in early November 2018 by £1,000, while incentives of £2,500 to buy new hybrid cars were abolished. 254 Gwyn Topham, Scrapping UK Grants for Hybrid Cars ‘Astounding’, Says Industry, Guardian (Oct. 12, 2018), https://www.theguardian.com/environment/2018/oct/12/scrapping-uk-grants-for-hybrid-cars-astounding-says-industry.

In GB, there is currently a Carbon Price Floor, capped at £18 per tonne of CO2 until 2021. 255 David Hirst, Carbon Price Floor (CPF) and the Price Support Mechanism (2018). Companies also pay for carbon credits through the EU Emissions Trading Scheme. If, the UK falls out of the ETS post-Brexit, then there may be an incentive to apply an additional Carbon Tax to that applied under the ETS scheme. 256 Richard Partington, Darling and Howard Back Call for Post-Brexit Carbon Tax, Guardian (Oct. 10, 2018, 7:01 PM), https://www.theguardian.com/business/2018/oct/10/darling-and-howard-back-call-for-post-brexit-carbon-tax.

c. Reflections on the Regulatory Framework

The UK’s regulatory framework is complex, made more so by the different devolution arrangements among the various regions of the UK. Undoubtedly, the UK’s ad hoc and somewhat haphazard approach to devolution will continue to pose a challenge to the design and implementation of a coherent national regulatory framework. The central Westminster government must therefore continue to keep the channels of communication open with its regional counterparts and ensure close coordination with all.

Another important consideration for the UK in the short-medium term will be the outcome of the ongoing Brexit negotiations. 257Overseas Electricity Interconnection, Houses of Parliament: Parliamentary Off. of Sci. & Tech, 5, n. 569 (2018). The UK’s regulatory framework does not seem entirely coherent. The decline in private investment and reduction in renewable energy developments should be a major concern, as it indicates that the lack of coherency in the regulatory framework is beginning to impact green investment. While the Clean Growth Strategy sets out a clear pathway to the achievement of its low-carbon transition, it is increasingly apparent that strategy alone will not be adequate to meet the country’s targets.

In response to the growing criticism, the government commissioned a review of its electricity market policies. The “Cost of Energy” Review was published in October 2017, and recommended a series of changes in response to the Review’s central findings: (1) that the cost of energy is higher than necessary to meet the Government’s policy objectives; (2) to be consistent with the Climate Change Act 2008; and (3) that the regulatory framework and market design is “not fit for the purposes of the emerging low-carbon energy market …. ” 258 Dieter Helm, Cost of Energy Review at xi (2017). The recommendations include: (1) replacing current incentives (FITs and CfDs) for low carbon generation with a single carbon price, and a unified capacity auction; (2) the replacement of the current specific licensing scheme with a “general” license covering distribution, supply and generation; and (3) the creation of a National System Operator and Regional System Operator to oversee the maintenance, development, and operation of the grid network. 259See generally id. The government has launched a call for evidence on these proposals, but the results are pending.

2. Energy Security Dimension

The UK’s energy dependency was estimated at 45.5% while the EU average was 53.4%, as of 2014. 260The EU Was Dependent on Energy Imports for Slightly Over Half of its Consumption in 2014, Eurostat (Feb. 4, 2016), http://ec.europa.eu/eurostat/documents/2995521/7150363/8-04022016-AP-EN.pdf/c92466d9-903e-417c-ad76-4c35678113fd. Among the five EU Member States that consume the largest amounts of energy—France, Germany, Italy, Spain, and the UK—the UK was the one displaying the lowest reliance on energy imports. 261Id. Since the early 2000s, the UK has undergone the transition of becoming a net energy importer after many years of being a net energy exporter. This pattern has become more acute in recent times as the UK increasingly resorts to importing energy supplies from abroad to meet its energy needs. 262UK Energy: How Much, What Type and Where From?, Off. for Nat’l Stat., (Aug. 15, 2016), https://visual.ons.gov.uk/uk-energy-how-much-what-type-and-where-from/.

The GB system shares cross-border electricity infrastructures with North-West Europe and the SEM. The manufacture of new cross-border links with Norway (NSN and NorthConnect), Denmark (Viking), Germany (NeuConnect), Belgium (NEMO), France (GridLink, ElecLink, Aquind, IFA2, and FAB Link), and the Republic of Ireland (Greenlink and Greenwire) is relevant. 263 Jason Mann, Brexit and Electricity Interconnectors, Energy Pol’y Res. Group (May 12, 2018), https://www.eprg.group.cam.ac.uk/wp-content/uploads/2018/05/J.-Mann.pdf.

In addition to the Moyle Interconnector, which attaches the Northern Ireland grid to the GB grid at Scotland, three interconnectors attach Northern Ireland to Ireland (and thus reinforce the links between GB and Ireland). A double circuit 275kV line runs from Tandragee in Northern Ireland to Louth in Ireland. 264Cross-Border Interconnection, Dep’t for Econ., https://www.economy-ni.gov.uk/articles/cross-border-interconnection (last visited Oct. 10, 2019). Two stand-by 110kV interconnectors connect at Strabane in Tyrone County and Enniskillenin in Fermanagh County. 265Id. A new “North South” 400kV overhead line is underway. 266North South Interconnector, Sys. Operator for Northern Ireland, http://www.soni.ltd.uk/__uuid/2845daef-b91b-4a2e-9421-4ce38622052e/ (last visited Oct. 10, 2019).

As of 2017, the UK imported 4.2% of its electricity requirements and 36.8% of its gas requirements. 267 Suzanna Hinson & Sara Priestley, Brexit: Energy and Climate Change, House of Commons Library 11 (Sep. 5, 2019). NGET foresees a rise in interconnectors as intermittent renewable energy sources play an increasingly crucial role in meeting demand. 268System Operability Framework 2016, Nat’l Grid, https://www.nationalgrideso.com/sites/eso/files/documents/8589937942-SOF%202016%20-%20Launch%20Event%20Slides%20-%20Key%20Messages%20and%20Insights.pdf (last visited Oct. 10, 2019). The same, of course, can be said of Northern Ireland. 269Dep’t for Bus., Energy & Indus. Strat., Updated Energy and Emissions Projections 2017, at 35 (2018).

Interesting questions regarding the UK’s security of supply would arise in the post-Brexit context. At present, the UK as a whole is part of the IEM, but the GB market and the whole-of-Ireland I-SEM function as two distinct, constituent markets. If the UK were to stay fully integrated with the IEM after Brexit it would need to comply with the EU’s energy market rules, as well as other relevant legislation. It would also likely need to accede to the jurisdiction of the ECJ, as far as this extended to jurisdiction over the IEM. In the event this proves to be politically unpalatable, then the UK may exit from the IEM.

The UK’s exit from the IEM would impact on the trade of energy through the interconnectors, with its energy market decoupled from the EU IEM. Such a scenario may result in tariff barriers to the cross-border supply of energy between the UK and those participating in the IEM, although the EU does not generally apply tariffs to imported energy from non-EU countries. 270 The Impact of Brexit on the EU Energy System, Eur. Parl. Doc. (COM 614.181) 14 (2017). However, tariffs may apply to products otherwise used in the construction and maintenance of the grid. Moreover, the UK’s ongoing interconnection projects would likely face new obstacles, with implications for the security of its energy supply.

The UK is also concerned about the impact of Brexit on the whole-of-Ireland I-SEM. BEIS has recommended that the I-SEM be ring-fenced, 271Leaving the EU, supra note 171, at 23. and a number of options have been put forward to develop new IEM partnership models, with the maintenance of the I-SEM at their heart. 272 Antony Froggatt, et al., Staying Connected: Key Elements for UK-EU27 Energy Cooperation After Brexit, 2017 Chatham House: Royal Inst. of Int’l Aff. 3, 22–23, 50–51. In the event that the I-SEM cannot be maintained, contingency plans are being put in place to establish a separate Northern Ireland market. 273 Dep’t for Bus., Energy & Indus. Strategy, Trading Electricity From 1 January 2021, GOV.UK, https://www.gov.uk/government/publications/trading-electricity-if-theres-no-brexit-deal/trading-electricity-if-theres-no-brexit-deal (last visited Feb. 24, 2020). Given however that the whole-of-Ireland I-SEM will be fully integrated with EU markets prior to Brexit, and in light of the potential efficiency losses for the GB market should it exit the IEM, it seems that the risk of a whole-of-UK exit from the IEM is relatively distant. Indeed, it is probable that the UK’s preference will be to stay in the IEM and reinforce its energy security ties with its European neighbors.

E. Smart Metering Systems

The Smart Meter Implementation Programme (SMIP) establishes the legal framework for the installation of smart meters, both for gas and electricity, in every household in Great Britain by 2020. Predictions are that, by 2020, approximately fifty million smart meters would be fitted in approximately thirty million properties across England, Scotland, and Wales. 274Smart Meters Explained, Smart Energy GB, https://www.smartenergygb.org/en/about-smart-meters (last visited Feb. 24, 2020). Over fourteen million smart meters have already been installed. 275Id. According to Smart Energy GB, a not-for-profit organization, the SMIP represented “the biggest national infrastructure project in our lifetimes.” 276Id.

The Data Communications Company (DCC) is the entity charged with the control of the smart metering communication system in the UK. However, a wide variety of actors has been crucial in the promotion of smart metering systems over the last decade. Smart GB, BEIS, Ofgem, as well as the energy supplier’s SSE, and British Gas rank among the most enthusiastic supporters of, and active participants in, this “smart” transition. 277 Benjamin K. Sovacool et al., Vulnerability and Resistance in the United Kingdom’s Smart Meter Transition, 109 Energy Pol’y 767, 772 (2018). After several delays, the SMIP was officially launched in November 2016.

At the time of writing, over fourteen million smart meters have been deployed. The UK is therefore not on course to achieve its 2020 target. According to some, this is because of the UK’s decision to entrust the roll-out to energy suppliers and not to the distribution system operators. The EU view on smart grid development has been based around an unbundled utility, with the freedom to act as a “neutral market facilitator.” 278Agency for the Cooperation of Energy Regulators, Energy Regulation: A Bridge to 2025 Conclusions Paper 21 (2014). The UK has departed from this approach by handing control of the roll-out to the suppliers, with DSO and regulator both having a marginal role. Given its pro-market mentality, this decision is unsurprising; but it has proven to be a fundamental mistake. By removing smart meters from the regulated asset base, the UK raised the capital costs, with customers funding the difference. 279 Dieter Helm, Not So Smart–What has Gone Wrong with the Smart Meter Program and How to Fix it 2 (Energy Futures Network Paper 23, 2017). Moreover, with such a variety of energy suppliers participating in the UK’s market, the roll-out has become fragmented. The handing over of control to the suppliers was also flawed insofar as the government failed to acknowledge that suppliers were driven by profit considerations, not grid optimization. Accordingly, their incentives actually undermine the neutrality principle that ought to underpin the network. Thus, the regulatory incentives and other regulatory mechanisms crucial for the encouragement of an efficient roll-out of the program were not present in the UK.

A novel aspect of the smart meter program in the UK, which stems from the supplier-led roll-out, is the fact that UK smart meters always include an in-home display (IHD), together with a data hub. 280 Sovacool et al., supra note 277, at 769. A further distinguishing characteristic of the UK is that it pushes separate electricity and gas smart meters, increasing the resource burden associated with the roll-out. 281Id. at 767. By linking other services to the smart meter program, it was much easier for suppliers to keep the customer locked in. Thus, despite the pro-market ideology underpinning the roll-out, it could be argued that the UK’s program in fact facilitated anti-competitive behaviors amongst the incumbent, and most dominant, energy suppliers. 282 Helm, supra note 279, at 4.

The SMIP epitomizes the problems which arise when policy aims exceed technological capabilities. 283 Sovacool et al, supra note 277 at 772. A survey conducted by Utility Week in 2017 established that more than ten percent of residential properties have required, or will need, multiple attempts to install their smart meters correctly. 284Id. at 773. Reasons for incomplete deployments include: (1) absent customers during installations; installations taking longer than anticipated; (2) smart meters being either inaccessible or a substantial distance apart; and (3) the challenges presented by multiple occupancy properties. As a consequence, it is thought that the costs of the SMIP may increase on BEIS estimates by up to one billion pounds. 285Press Release, The Big Deal, Smart Meter Rollout Could Cost £1 Billion More Than Predicted, Big Deal (Feb. 2, 2017), https://blog.thebigdeal.com/total-cost-smart-meter-rollout-massive-12-billion/. If these estimates prove to be correct, the total costs of the SMIP would soar to twelve billion pounds. 286Id. In light of these difficulties, the Smart Meters Bill was introduced in Parliament in October 2017. 287Dep. for Bus., Energy & Indus. Strategy, Smart Meters Bill: Overview and Questions & Answers 4 (2017).

The roll-out in the UK has been ambitious, but the implementation of the SMIP has not achieved the expected results. Technical challenges have led to a retreat from its initial targets. Meanwhile, the decision to put the roll-out in the hands of the incumbent energy suppliers made the mistake of obeying the logic of the existing system. As a result, the SMIP has not adequately engaged with the customer: it boasts of empowerment, without communicating how this empowerment results in gains to the customer. The lack of engagement has resulted in resistance and apathy towards smart meters; unfortunately, tackling this social dimension has not been at the forefront of the SMIP. 288 Sovacool et al., supra note 277, at 774. Vulnerability (poverty and age), concerns about cyber security and privacy, and the possible health effects of the technology have all been identified as translating into resistance towards the SMIP. 289Id. Accordingly, understanding what it is that consumers want, and tailoring the program to meet this, should be a core focus of the SMIP over the coming months and years.

Given the persistent apathy and even resistance towards the roll-out, it is important that control of the SMIP be given to distribution. This has worked elsewhere, such as in Ireland. As the focus of distribution is on the optimization of the network, it is in a far better position than the incumbent market suppliers to implement a roll-out that places customers at its heart. The legislative hurdles to this would be significant, but if there was a consensus on putting the distributors in charge, then it would be possible to put the necessary contractual arrangements in place. Once in the hands of the distributors, the program could be made a condition of supply. This would remove the social hurdles currently experienced by the SMIP. In addition to rethinking the governance of the program, Ofgem and BEIS should consider carefully how to design smart meters in a way that responds to the social dimension of the roll-out. In particular, the regulator and government should seek to understand the reasons behind the rejection rate for smart meters and should consult on how best to encourage behavioral change and reductions in energy consumption through the SMIP.

Note that in Northern Ireland, the Department for the Economy has no intention of installing smart meters at present. 290Meter Replacement Programme, Northern Ireland Electricity Networks, https://www.nienetworks.co.uk/meterupdate (last visited Oct. 18, 2019). Presumably, any program would be informed by smart meters in both GB and Ireland.

F. Demand Response

1. Great Britain

Harnessing grid flexibility is seen as a central pillar of the transition to a smarter, more efficient, and more stable electricity grid. Non-synchronous energy sources will put the existing grid under increasing pressure, unless these can be harnessed through a more flexible, responsive network. Innovative demand side response (DSR) technologies can help to balance non-synchronous generation with demand and can therefore provide essential services to the grid. Accordingly, DSR technologies play a key role in GB’s energy strategy.

The market framework for DSR technologies is underpinned by a series of publications. Among them is a 2017 Report to the Committee on Climate Change, which included the “Roadmap for Flexibility Services to 2030.” 291Pöyry, Roadmap for Flexibility Services to 2030: A Report to the Committee on Climate Change 3 (2017). BEIS subsequently published its response to its own consultation on a Smart Flexible Energy System. This paper was titled “Upgrading Our Energy System: A Smart Systems and Flexibility Plan,” and was published in partnership with Ofgem. 292HM Gov. & Ofgem, Upgrading Our Energy System: Smart Systems and Flexibility Plan 1, 3 (2017) [hereinafter Upgrading Our Energy System]. A progress update was published in late 2018, with grid flexibility continuing to be seen as a central plank of the low-carbon transition. 293HM Gov. & Ofgem, Upgrading Our Energy System: Smart Systems and Flexibility Plan: Progress Update 3 (2018). The significance of the 2017 Plan is underscored by both the Clean Growth Strategy of October 2017 294HM Gov., The Clean Growth Strategy: Leading the Way to a Low Carbon Future 45 (2017). and the Industrial Strategy of November 2017, 295HM Gov., Industrial Strategy: Building a Britain Fit for the Future 45 (2017). within which it features prominently. The government’s commitment to the 2017 Plan is demonstrated by its decision to back the framework with £265 million of public funds. These funds will be directed towards incentivizing storage innovations, as well as accelerating demand response technologies. 296Funding for Innovative Smart Energy Systems, GOV.UK, https://www.gov.uk/guidance/funding-for-innovative-smart-energy-systems (last update June 20, 2019).

In 2018, Utility Week, in association with CGI, published the results of its research into DSR in a paper entitled Embracing Flexibility: Transforming the Power System by 2030. 297Utility Week & CGI, Embracing Flexibility: Transforming the Power System by 2030, 17–19 (2018). It identified that the most significant barriers to demand side flexibility remains the lack of a commercial or market framework (identified by 7.1/10), closely followed by the inability to stack value (at 6.9/10). 298Id. at 5. Customer side barriers (identified by 46.9%) are also seen as a significant barrier to demand side flexibility projects, only just behind the economic barriers (50%). 299Id. These customer side barriers are predominated by low levels of customer awareness (identified by 86.7%), which are slowing down the adoption of flexible, low carbon technologies and the realization of the benefits. 300Id.  In light of this, Utility Week has identified that the following refinements need to be made to GB’s demand response framework: (1) raising consumers’ awareness of the benefits arising from low carbon and connected home tech; (2) identifying the technical challenges for projects, including those relating to electric vehicles; and (3) delivering a robust market framework. These findings are supported by the Demand Side Response: Aligning Risk and Reward 2018 Report produced by The Energyst in partnership with National Grid, among others. 301The Energyst, Demand Side Response: Aligning Risk and Reward: 2018 Report, (2018).

a. Demand Response Market Players

Currently, DSR providers can deliver services by either reducing their demand or taking advantage of onsite generation. Large industrial and commercial customers, small to medium enterprises, or aggregators can participate. 302National Grid ESO, Demand Side Response (DSR), https://www.nationalgrideso.com/balancing-services/demand-side-response-dsr (last visited Feb. 24, 2020). The integration of independent aggregators into the market is seen as crucial step in the delivery of system flexibility. Ofgem has been a leader in driving the necessary changes to market infrastructure. 303Independent Aggregators and Access to the Energy Market–Ofgem’s View, Ofgem, https://www.ofgem.gov.uk/publications-and-updates/independent-aggregators-and-access-energy-market-ofgem-s-view (last visited Feb. 24, 2020).

Residential DSR is crucial for achieving electricity system flexibility. However, the DSR market remains closed to the domestic prosumer. Time of Use tariffs could help to drive changes to domestic consumer behavior, opening up the residential market to demand response schemes. Eliminating constraints to uptake and response should be a key UK strategy moving forward, whether that be through financial incentive schemes, or information-only schemes which rely on information campaigns and technologies to encourage behavioral pattern changes. UK Power Networks ToU tariff trial appears to have demonstrated that domestic consumers would be willing participants in the market; deploying such tariffs on a wider scale could therefore help to engage the residential market in demand response technologies. 304UK Power Networks, Residential Demand Side Response for Outage Management and as an Alternative to Network Reinforcement 2 (2014).

b. Balancing Services

National Grid offers a number of DSR schemes. 305Balancing Services, National Grid ESO, https://www.nationalgrideso.com/balancing-services (last visited Feb. 24, 2020). Only some of the available schemes are outlined below, for brevity.

i. Balancing Mechanism

The Balancing Mechanism helps National Grid to balance supply and demand in close to real time, in each half hourly trading period of every day. 306National Grid, Wider Access to the Balancing Mechanism Roadmap 8 (2018). During this time National Grid can instruct parties to increase or decrease their generation or consumption. All wholesale market participants will register with the Balancing Mechanism.

National Grid is looking into the reform options of the Balancing Mechanism, with a view to extending access and removing barriers to entry to the mechanism.

ii. Reserve Services/ Frequency Response

Short Term Operating Reserve (STOR) is a reserve service for the provision of extra power or reduction in demand in terms of grid stress. 307Short Term Operating Reserve (STOR), National Grid ESO, https://www.nationalgrideso.com/balancing-services/reserve-services/short-term-operating-reserve-stor?overview (last visited Feb. 24, 2020). It is a contracted balancing service, whereby the service provider delivers a contracted level of power on request. A minimum capacity threshold of 3 MW of generation or demand reduction applies. Sites below 3 MW may participate via an Aggregator. Other reserve schemes include Fast Reserve and Demand Turn Up. 308Reserve Services, National Grid ESO, https://www.nationalgrideso.com/balancing-services/reserve-services (last visited Feb. 24, 2020).

Firm Frequency Response (FFR) provides either a dynamic or non-dynamic response to changes in frequency. 309Firm Frequency Response (FFR), National Grid ESO, https://www.nationalgrideso.com/balancing-services/frequency-response-services/firm-frequency-response-ffr?overview (last visited Feb. 24, 2020). There are three response speeds: (1) within 10 seconds of an event, sustained for 20 seconds; (2) within 30 seconds of event, sustained for further 30 minutes; and (3) within 10 seconds of an event, sustained indefinitely. 310Id. A minimum capacity threshold of 1 MW response energy applies. FFR was one of the most valuable services on a £/MWh basis, however the margins have been eroded.

iii. Capacity Market 311 The following section is accurate as of the time of writing, December 2018. The Capacity Market restarted in October of 2019.

The Capacity Market (CM) was established as part of the reform package introduced under the Energy Act 2013. The CM seeks to guarantee the uninterrupted supply of electricity. 312Ofgem, Capacity Market (CM) Rules, https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules (last visited Oct. 18, 2019). The CM remunerates demand side response providers for lowering demand at times of peak demand. 313 Massie & Norman, supra note 130. The CM is delivered and implemented by National Grid.

Auctions are organized either one (T-1 Auctions) or four (T-4 Auctions) years ahead of the year in which capacity must be supplied. The third main CM auction was successfully concluded in the 2016 T-4 Auction (for delivery in 2020–2021). 314Id. Around 70GW of capacity entered the process, with 75% of capacity (52.4 GW) securing capacity agreements at a total forecast cost of £1.18b (in 2016 prices). 315Dep. for Bus., Energy & Indus. Strategy, Contracts for Difference and Capacity Market Scheme Update 4 (2017). A supplementary auction followed in February 2017, with 54.4GW of capacity secured. 316Id. Preceding full entry into the CM in 2018–2019, DSR was offered targeted support by way of two Transitional Arrangements Auctions, the second of which secured 312MW of capacity. 317Id.

DSR providers may now deliver their services via the CM. However, despite its claim of technology neutrality, there are considerable barriers to DSR’s effective participation in the CM. In order to participate in the CM, DSR must have a (proven or unproven) capacity of not less than 2MW, according to the Capacity Market Rules. 318See generally Electricity: The Capacity Market Rules 2014. Moreover, the capacity agreements vary significantly in length. While electricity generators can bid for contracts between three and fifteen years, all other capacity providers including DSR can only acquire a one-year contract. 319See Capacity Market Standstill: The Perfect Time to Move Forwards, SmartestEnergy (July 2, 2019), https://smartestenergy.com/info-hub/blog/capacity-market-standstill-the-perfect-time-to-move-forwards/. DSR must also provide a capital bond (a “bid bond”) when bidding for one-year contracts. 320See Electricity: The Capacity Market Rules 2014, supra note 318, at 51 (defining “Applicant Credit Cover”). This means that DSR is placed at a considerable disadvantage when competing on the CM. DSR providers are also troubled by the government’s decision to reduce T-1 auction volume, out of concerns that the smaller volume may mean that DSR providers can easily be outbid by a larger power station. 321House of Commons: Energy & Climate Change Committee, The Energy Revolution and Future Challenges for UK Energy and Climate Change Policy: Third Report of Session 2016–17, at 17 [hereinafter The Energy Revolution]. Another worrying development has been the recent suggestion, by the utility Scottish Power, that DSR which uses behind-the-meter batteries will be subject to the same deratings as standalone batteries treated as generating assets. This proposal has been described as “misguided” by DSR experts, not least because it fails to recognize the flexibility inherent in turn-down DSR, and its different characteristics and capabilities. 322 B. Coyne, Should Ofgem Consider Derating DSR Plus Battery Storage? Aggregators Weigh In, Energyst (Mar. 23, 2018), https://theenergyst.com/ofgem-right-consider-derating-capacity-market-dsr-aggregators-weigh/.

Notably, the CM in the UK has been temporarily suspended following the recent European Court decision that the Commission failed to adequately investigate the plan for the CM prior to formally approving it. 323 Case T-793/14, Tempus Energy Ltd. v. European Comm’n, ECLI:EU:T:2018:790, ¶ 37. In particular, the court concluded that the Commission did not analyze whether the difference in treatment between DSR and generators was appropriate. 324Id. It is likely that some form of market redesign will now be necessary. Given the barriers that DSR faces when participating in the market, it is clear that there is scope to intelligently update the model. Removing the capital bond and extending the length of contracts available are two examples of possible improvements. The government is aware of the need to refine the market, but at present it continues to be driven by logic of the incumbent, large generation facilities. Until this underlying bias is removed, the capacity market will likely continue to fall short with regard to DSR.

Finally, and aside from the DSR issues, there have been long-standing calls to open up the CM to renewables—the government has now identified this as a high priority strategic goal. 325HM Gov., Delivering Clean Growth: Progress Against Meeting our Carbon Budgets–The Government Response to the Committee on Climate Change 23 (2018). Renewables have to date been largely precluded from bidding in the auction, as they are almost entirely supported by subsidies. However, with solar and onshore wind likely to be viable without subsidies in the near future, it is possible that a raft of new projects could soon be eligible to enter the CM. The government is examining how renewables could be integrated in the future and is currently consulting with stakeholders on a possible redesign of the CM mechanism.

2. Northern Ireland

DSR is managed through the whole-of-island I-SEM. Accordingly, it is a joint undertaking regulated by the CRU and UREGNI, with the TSOs and DSOs also engaged in the establishment of a viable market framework.

a. Demand Response Market Players

Consumers can participate in demand side response through tariff-based schemes, including Economy 7 (Northern Ireland). In addition to individual demand side participation, medium to large users can participate in a Demand Side Unit (DSU) or Aggregated Generating Unit (AGU). 326Demand Side Management (DSM), EirGrid Group, http://www.eirgridgroup.com/customer-and-industry/becoming-a-customer/demand-side-management/ (last visited Feb. 24, 2020). A DSU consists of one or more individual demand sites, which can reduce their demand as requested by the TSO (SONI in Northern Ireland, EirGrid in Ireland). A DSU can contract with other DSUs, and aggregate these to form a single, aggregated unit.

As with the UK, the domestic prosumer is currently precluded from entry into the demand side market. However, the I-SEM is working towards the integration of domestic customers into future demand response services. The DSOs are investing in the grid to ensure that projected capacity—in particular that arising from the smart meter roll-out—is realized. 327Flexibility on Our Networks, ESB Networks, https://www.esbnetworks.ie/who-we-are/innovation/our-innovation-strategy/flexibility-on-our-networks (last visited Feb. 24, 2020).

b. Capacity Market

A single capacity market operates across the whole of the island of Ireland. Generators are encouraged to participate in the Irish CM through a mechanism called the Capacity Remuneration Mechanism. 328Capacity Remuneration Mechanism, Utility Regulator, https://www.uregni.gov.uk/capacity-remuneration-mechanism-0 (last visited Feb. 24, 2020). These payments are made available through a competitive auction process under the I-SEM.

The capacity auction market is now fully functional, although teething issues have been identified. DSUs are able to participate in the capacity auction market as generators. However, it has been revealed that DSUs with a limited duration for demand reduction (of less than or equal to 6 hours) will now receive the same de-rating factors applied to energy storage, despite the fact that demand response and storage are completely different technologies. 329 David Pratt, Demand Response Facing De-Rating in Irish Capacity Market, Current (June 8, 2019), https://www.current-news.co.uk/news/demand-response-facing-de-rating-in-irish-capacity-market##targetText=David%20Pratt&targetText=Demand%20side%20response%20in%20the,the%20country’s%20electricity%20market%20authority. This change will apply from capacity year 2019–2020. Critics argue that this will discourage demand side response providers from participating within I-SEM and the Irish CM by reducing the available revenues.

The CRM has received State Aid clearance from the European Commission. 330See State Aid: Commission Approves Joint Capacity Mechanism for Ireland and Northern Ireland, European Commission (Nov. 24, 2017), https://ec.europa.eu/commission/presscorner/detail/en/IP_17_4944. However, the changes relating to DSUs may leave the CRM open to the accusation that demand-side response technologies are being hampered from participating effectively alongside generation. This is particularly pertinent given the recent ruling of the General Court of the European Union, which has resulted in the temporary suspension of the UK market. 331 Case T793/14, Tempus Energy Ltd. v. European Comm’n, ECLI:EU:T:2018:790, ¶ 37.

3. Reflections on Demand Response

There are still formidable barriers to DSR in the UK and Northern Ireland, with revenue and policy uncertainty posing significant obstacles to prospective participants. Improving business knowledge and understanding about the various DSR schemes will be key. To this end, National Grid’s System Needs and Product Strategy (SNAPS) publication, which sought feedback on how to simplify current balancing schemes, was a welcome development in the UK space. Since then, National Grid has produced three roadmaps: (1) Product Roadmap for Frequency Response and Reserve; (2) Product Roadmap for Restoration; and (3) Product Roadmap for Reactive Power, with a series of deliverables which set out to encourage more widespread participation in the balancing services market. 332See Future of Balancing Services, National Grid ESO, https://www.nationalgrideso.com/publications/future-balancing-services (last visited Mar. 2, 2020). However, the complexities of the market mean that a straightforward, independent industry guide to DSR is well overdue. Collaboration by National Grid with the market incumbents (suppliers, aggregators) on such a project could therefore be most advantageous.

G. Data Protection

The Data Protection Act 1998 articulates the basic legal framework in the UK. 333 The Data Protection Act 1998, c. 29 (UK). Despite the UK’s decision to withdraw from the EU, Regulation (EU) 679/2016, also known as General Data Protection Regulation (GDPR), will still be applicable to the UK while it remains a part of the EU. 334 Council Regulation 2016/679, O.J. (L 119) 1. Meanwhile, companies doing business with the EU post-Brexit will need to comply with the GDPR due to its extraterritorial reach. The Data Protection Act 2018 complements the GDPR and is now fully in force. 335 Data Protection Act 2018, c. 12 (U.K.).

The national data protection authority is the Information Commissioner’s Officer (ICO). 336Guide to Data Protection, ICO, https://ico.org.uk/for-organisations/guide-to-data-protection/ (last visited Mar. 2, 2020). The ICO promotes transparency in public entities and safeguards data privacy for citizens. 337Id. To this end, it provides guidance to both citizens and organizations and enforces compliance with relevant regulations.

Where consumption data comes with information that could be used to determine the identity of, and limited information about, a consumer, that consumption data is treated as personal data. 338Ofgem, Access to Half-Hourly Electricity Data for Settlement Purposes 13–14 (2018) [hereinafter Access to Half-Hourly Electricity Data]. Accordingly, the access of parties to information of this nature is subjected to compliance with the applicable legislative instruments. More concretely, those wishing to access this electricity data must observe the provisions of the Data Protection Act 1998—in respect of treatment of personal data. As well the Privacy and Electronic Communications Regulations 2003—with regard to the privacy of consumers using communication network or services. Further, the electricity distribution license delineates in its Condition 10A (SLC10A) the terms and requirements under which DSOs can obtain, access and use consumption data provided by smart metering systems. 339Gas and Electricity Mkts. Authority, Standard Conditions of the Electricity Distribution Licence 53 (Aug. 25, 2017), https://epr.ofgem.gov.uk/Content/Documents/Electricity%20Distribution%20Consolidated%20Standard%20Licence%20Conditions%20-%20Current%20Version.pdf. Pursuant to 10A.2, licensees must not, subject to certain conditions, obtain consumption data relating to a period of less than one month. 340Id. There are also restrictions on the use of data. DSOs must submit “data privacy plans” to the national regulator, Ofgem. In these plans, the network operators clarify the manner in which the consumption data will be anonymized, to ensure that the processed data cannot be used to identify a particular household. 341Ofgem, Smart Meters: Distribution Network Operators Privacy Plans, https://www.ofgem.gov.uk/electricity/retail-market/metering/transition-smart-meters/smart-meters-distribution-network-operators-privacy-plans (last visited Nov. 3, 2019).

In 2012, the government conducted research into the public’s attitude towards data and privacy in relation to smart metering. The result was the Smart Metering Data Access and Privacy: Public Attitudes Research document, published in December 2012. 342See Department of Energy & Climate Change, Smart Metering: Data Access and Privacy (2012). A particular concern was the perceived intrusiveness of frequent meter readings, and some respondents were suspicious about the level of detail collected. Reservations about data protection persisted. Certain security risks were also identified: in particular, the fact that more detailed data could be used, theoretically, to identify a consumer’s absence from their home. 343See id. at 14–17.

The Data Access and Privacy Framework (DAPF) for smart meters regulates the use of customer’s energy consumption data stemming from smart meters. 344See generally Dept. for Bus., Energy & Indus. Strategy, Smart Metering Implementation Programme (2018). This Framework determines the access by market participants to energy consumption data. The precise granularity of the data that can be accessed is dependent on whether the consumer has decided to opt in or out of the program. The DAPF issues the following basic instructions to energy suppliers:

By default, energy suppliers can access monthly and daily consumption data in the interest of billing and accounting.

Provided the supplier has the customer’s consent, or the customer has not opted out, energy suppliers can access consumption data more detailed than monthly, but not more detailed than daily.

If the customer decides to opt in, energy suppliers can access more detailed data, down to half-hourly data. 345Id.

Energy network operators can only access data relating to periods of less than one month if they have obtained the consumer’s consent to do so or have implemented Ofgem-approved procedures relating to the anonymization of that data. No restrictions are imposed on the network operator or supplier regarding access to other (non-consumption) data, provided that access complies with existing data legislation. 346Id. at 9–10. Rules apply to third party access to consumption data.

The existing framework has been supplemented by the Smart Meters Act 2018 (which extends to England, Wales, and Scotland only). 347See Smart Meters Act 2018, c. 14 (UK). The SMA 2018 has granted Ofgem additional powers to implement market-wide Half-Hourly (HH) Settlement Data for domestic and smaller non-domestic customers. 348See id. As part of its review into the settlement arrangements for HH data, Ofgem is considering three options: (1) an “Opt-In” program, where access is subject to existing rules; (2) an “Opt-Out” program, where there is a legal obligation on the responsible settlement party to process HH data unless the consumer opts-out; or (3) a “Mandatory” option. 349Access to Half-Hourly Electricity Data, supra note 338, at 5. Two additional enhanced privacy options are also being considered: (1) anonymization of data post-settlement; and (2) a “hidden identity” option which would entail the “pseudonymization” of data through the use of a unique identifier which obscures the consumer’s “real world” identity. 350See id. at 28–37. Ofgem is currently consulting on the issue, although responses have now closed. 351Access to Half-Hourly Electricity Data, supra note 338, at 13–14.

Privacy concerns continue to be one of the major hurdles to the public uptake of smart metering technology: assuaging these concerns is therefore one of the main challenges for those supporting the roll-out. The UK’s regulatory framework has been bolstered by the GDPR, but the data management model that will emerge post-Brexit remains an unknown. While it is likely that the UK’s post-Brexit data management model will take its lead from the provisions of the GDPR, not least because the unravelling of the data privacy framework would be of huge, and vocal, public interest, the UK’s pro-market tendencies loom large on the agenda. To date, it has placed the responsibility for the smart metering roll-out securely in the hands of the suppliers. It must therefore ensure that whatever data management model it ends up with establishes an appropriate balance between these commercial interests and the public’s data privacy concerns.

H. Electric Vehicles and Energy Storage

1. Electric Vehicles

Pursuant to the Climate Change Act 2008, the UK has set itself the objective to cut greenhouse gas emissions by 80% by 2050, with Electric Vehicles forming a key part of the UK’s strategy. 352 House of Parliament: Off. of Sci. & Tech., Electric Vehicles: Postnote No. 265, 2010 (U.K.). The UK government has taken a number of steps with respect to the promotion of EVs, including the establishment of the Office for Low Emissions Vehicles (OLEV). 353 Office for Low Emission Vehicles, GOV.UK, https://www.gov.uk/government/organisations/office-for-low-emission-vehicles (last visited Feb. 24, 2020). It has also promoted the discontinuation of petrol and diesel cars in the UK from 2040 onwards. 354Energy UK, The Electric Vehicle Revolution: A Report from Energy UK 4 (2017).

EVs feature prominently in BEIS’s Industrial Strategy. The government has established a £30 million fund to promote Vehicles-to-Grid technologies, with the aim of delivering a design and development model which illustrates how the electricity system could, at peak hours, benefit from the power stored in EVs. 355£30 Million Investment in Revolutionary V2G Technologies, GOV.UK, https://www.gov.uk/government/news/30-million-investment-in-revolutionary-v2g-technologies. (last visited Feb. 24, 2020).

Infrastructure is viewed as one of the main obstacles to the uptake of EVs. The Automated and Electric Vehicles Act 2018 endeavors to address this gap by giving the government new powers to require charging points be built at all motorway service stations and “large fuel retailers.” 356 Automated and Electric Vehicles Act 2018, c. 18 (UK). The Act builds on the Alternative Fuels Infrastructure Regulations 2017, including powers to create a uniform method of accessing charging points, and establish reliability standards. 357See The Alternative Fuels Infastructure Regulations 2017, No. 897 (UK). Notably, the part of the Act dealing with charging infrastructure applies to the whole of the UK.

The powers under the 2018 Act have been matched by the creation of the new Charging Infrastructure Investment Fund, in July 2018. 358See Charging Infastructure Investment Fund, GOV.UK, https://www.gov.uk/government/publications/charging-infrastructure-investment-fund (last visited Feb. 24, 2020). The CIIF is a £400 million fund, of which £200 million is government funding; the private sector will put forward the remaining £200 million. 359Details of the Operation of the Charging Infastructure Investment Fund, GOV.UK (Sept. 2019), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/834758/Details_of_the_operation_of_the_CIIF.pdf.

The government will also support infrastructure development by way of grant schemes. The Electric Vehicle Homecharge Scheme 360See generally Off. for Low Emission Vehicles, Customer Guidance: Electric Vehicle Homecharge Scheme (2019), is continuing and the Workplace Charging Scheme grant has been increased from a maximum of £300 to a maximum of £500 per socket. 361See Off. for Low Emission Vehicles, Workplace Charging Scheme Guidance for Applicants, Installers and Manufacturers 2 (2019). A second round of funding for local authorities to roll out low emission taxi charge point infrastructure is also planned, with £6 million available. 362See Office for Low Emission Vehicles, Ultra Low Emission Taxi Infrastructure Scheme: Winners, (2018).

As noted in Section iv above, the maximum grant now available for UK purchasers of EVs is £3,500. 363Low-Emission Vehicles Eligible for a Plug-in Grant, GOV.UK, https://www.gov.uk/plug-in-car-van-grants (last visited Feb. 24, 2020). The plug-in car grant was cut in early November 2018 by £1,000, while the grant worth £2,500 to buy new hybrid cars was abolished altogether. 364 Gwyn Topham, Scrapping UK Grants for Hybrid Cars ‘Astounding’, Says Industry, Guardian, 12 Oct. 12, 2018, https://www.theguardian.com/environment/2018/oct/12/scrapping-uk-grants-for-hybrid-cars-astounding-says-industry (last visited Nov. 3, 2019). The decision to cut the available incentives has been described as “astounding.” 365Id. While it is positive that some incentives remain in place, the decision does risk undermining progress on the low-emission and EV sectors.

Taxation is an area which has not garnered much focus from the government to date. The 2018 National Infrastructure Assessment recognizes that there may be a need for the government to consider a road pricing scheme, particular as revenue from fuel duty/vehicle excise duty decreases. 366See generally National Infrastructure Commission, National Infrastructure Assessment (2018). In addition to protecting tax revenue, an adequate pricing scheme would also help to finance road infrastructure development. However, despite the 2018 NIA’s recommendation, the government has not moved any moves to bring this to the forefront of its EV policy.

Finally, the Electric Vehicle Energy Taskforce has been launched to help to bring energy and transport sectors together to plan for EV uptake, and to ensure that the electricity system can meet future demand. 367See Energy Taskforce, Energising Our Electric Vehicle Transition. The creation of the EVET signals the collaborative approach which underlies the UK’s efforts to drive progress in the low emission transport sector. With regard to the most critical players, the National Infrastructure Committee envisages a key role for Ofgem in terms of regulating electric vehicles. 368See Ofgem Proposals a Good First Step to Preparing the UK for More Electric Vehicles, National Infastructure Commission (July 23, 2018), https://www.nic.org.uk/news/ofgem-proposals-a-good-first-step-to-preparing-the-uk-for-more-electric-vehicles/. EVs also feature strongly in each of National Grid’s latest Future Energy Scenarios. National Grid now predicts that there could be as many as 11 million EVs by 2030 and 36 million by 2050. 369National Grid, Future Energy Scenarios: System Operator 3 (2018). However, National Grid anticipates that smart charging technologies, consumer behavior changes (charging at off-peak times) and V2G technology should mean that the increase in peak electricity demand could be as little as 8GW in 2040. 370Id. Making this a reality will require close collaboration with all key stakeholders, including industry and research and development. However, the establishment of the EVET indicates that the UK is on the right track.

2. Energy Storage

BNEF forecasts that the global energy market is set to double six times by 2030, with the UK projected to play a key role in global growth. 371 Michael Holder, BNEF: Global Energy Storage Market to Double Six Times by 2030, BusinessGreen, (Nov. 22, 2017), https://www.businessgreen.com/bg/news/3021679/bnef-global-energy-storage-market-to-double-six-times-by-2030. Aurora Energy Research has found that storage must play a key part in the UK’s energy strategy, with 13GW of additional distributed and flexible generation assets needed by 2030 to balance the UK’s electricity grid as more renewable projects come online. 372Aurora: Smart Grids and Storage Present £6bn Opportunity, BusinessGreen (Oct. 12, 2018), https://www.businessgreen.com/bg/news/3064397/smart-grids-and-storage-present-gbp6bn-opportunity-through-to-2030. Battery storage is thought to be likely to grow fifty times compared to 2017 levels by the end of 2022. 373 Andy Colthorpe, UK Battery Storage to Enjoy ‘Explosive Growth’ to 2022, Energy Storage News (Feb. 14, 2018), https://www.energy-storage.news/news/uk-battery-storage-to-enjoy-explosive-growth-to-2022. Opportunities for storage assets will be driven forward by falling technology costs, as will the emergence of new revenue streams through the balancing, ancillary services and capacity markets.

Storage technologies feature prominently in the UK’s nationwide energy strategy. Storage was a key consideration in the National Grid’s System Needs and Product Strategy (SNaPS), published on June 13, 2017. 374National Grid, System Needs and Products Strategy (2017). Meanwhile, Ofgem has published a response to its “A Smart, Flexible Energy System: Call for Evidence” consultation. This response includes the Smart Systems and Flexibility Plan which sets out the proposed approach for integrating flexible and smart technologies into the evolving UK energy system. 375Upgrading Our Energy System, supra note 292.

The auction cleared at £6/kW per year. Meanwhile, GE has announced that its largest grid-scale battery storage system project (41MW) to date will be located in the UK. 376GE and Arenko to Build One of the World’s Largest Energy Storage Facilities in the UK, GE News Room (Feb. 5, 2018), https://www.genewsroom.com/press-releases/ge-and-arenko-build-one-world%E2%80%99s-largest-energy-storage-facilities-uk-284222. A giant 50MW battery storage facility is also planned. The facility will utilize technology provided by SMA Sunbelt Energy, a fully owned subsidiary of German energy storage specialist SMA Solar Technology AG. 377 K. Ross, Largest Battery Storage Project in UK is Unveiled, Power Engineering Int’l (Jul. 9, 2018), https://www.powerengineeringint.com/articles/2018/07/largest-battery-storage-project-in-uk-is-unveiled.html. Flexible services provider Battery Energy Storage Solutions (BESS) has also just raised more than $100 million in U.S. dollars in investment to target UK projects totaling 100MW. 378 A. Colthorpe, London’s BESS Targets 100MW with ‘Landmark’ US$40m Santander Investment, Energy Storage News (Jan. 15, 2018), https://www.energy-storage.news/news/londons-bess-targets-100mw-with-landmark-us40m-santander-investment. In the residential market, Nissan announced in January 2018 that it will be providing a system of solar panels and batteries to UK homes, stating that customers could save up to 66% on energy bills through their service. 379Nissan launches Nissan Energy Solar: The Ultimate All-in-One Energy Solution for UK Homes, Nissan News (Jan. 18, 2018), https://uk.nissannews.com/en-GB/releases/release-426215639. Further, UK-based energy storage and smart home firm Moixa has recently launched a new 4.8kWh battery storage device for domestic use, with an output of 1000W. 380 Annabel Andrews, Moixa Launches Its Biggest Domestic Battery at 4.8kWh, New Power (Oct. 10, 2018), https://www.newpower.info/2018/10/moixa-launches-its-biggest-domestic-battery-at-4-8kwh/.

Thus, the energy storage market has demonstrated its potential for significant growth in the coming years. The commitment of the regulator and TSO, together with infrastructural and regulatory developments showing both private and public commitment to increasing the role of storage on the UK electricity grid, have reinforced the role of storage in the UK’s transition strategy.

Nevertheless, there are gaps in the framework. These include those identified by Ofgem, and it is heartening that the regulator is leading the charge in creating a more robust, friendly market framework. An area that requires particular attention in the UK, as elsewhere, is the lack of a regulatory definition for the concept of energy storage. Article 2, paragraph 2, point (d) (i) of The Electricity (Class Exemptions from the Requirement of a License) Order 2001, which confirms that the operator of “equipment” which “is generating or is capable of generating electricity” will be regarded as generating electricity has led to the situation where storage is treated as a generation asset. 381See The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001, No. 3720, art. 2, ¶ 2 (d)(i) (UK). The categorization as generation asset means that the current definition fails to acknowledge the particularities of storage technologies. It also means that storage operators currently need to hold a generation license to operate unless an exemption applies (e.g. a “small generator” exemption). A separate asset class for storage would provide greater flexibility on who can own, operate and use storage, and the government appears open to the idea. 382The Energy Revolution, supra note 321, at 11. Ofgem also appears to have the view that storage should be defined as a distinct form of generation, as well as that new licensing arrangements should be introduced—these and other developments are awaited eagerly. 383 Andrew Burgess, Re-thinking the Energy System, Ofgem (Jul. 31, 2017), https://www.ofgem.gov.uk/news-blog/our-blog/re-thinking-energy-system. The results of a consultation relating to the regulatory regime for storage are eagerly awaited. 384Clarifying the Regulatory Framework for Electricity Storage: Licensing, Ofgem (Oct. 2, 2018), https://www.ofgem.gov.uk/publications-and-updates/clarifying-regulatory-framework-electricity-storage-licensing.

Under the dominant legal framework, the energy storage operator also faces the risk of double-charging. The Climate Change Levy (General) Regulations 2001 established a UK-wide levy on supplies of “taxable commodities,” which include the supply of electricity (but also gas, LPG and solid fuels) to business and public sector users. The main rates are paid by energy suppliers, with costs passed on to the consumer. The energy storage operator may end up paying double charges. The energy storage operator is legally classified as both an electricity consumer and generator. This leads to double-charging, with storage facilities charged once for the energy consumed (when charging) and then again for the energy they supply. The end-user is then charged for consuming the energy supplied by the storage facility. Appropriate use-of-system charges should therefore be put in place, with charges based on the actual power consumed. The lack of clarity around the current system poses a considerable regulatory barrier and adds to the perceived risks for investors. 385The Energy Revolution, supra note 321, at 10–11. In light of the double-charging issue, Ofgem has consulted on amendments to energy storage licenses; a decision on this is pending. 386Clarifying the Regulatory Framework for Electricity Storage: Licensing, supra note 384.

Given that battery storage is still an emerging technology, the regulator must also consider carefully how to maximize its revenue streams. Revenue channels may include a mixture of frequency response, capacity market payments, TRIAD revenue, and power supply payments. The challenge for the regulator will be to facilitate the construction of projects that can take advantage of multiple streams and demonstrate their bankability. A key issue in terms of the bankability of projects over the next few years is likely to be the extent to which storage applications can be readily combined with renewable energy generators accredited under the RO and FIT schemes. Ofgem has recently released draft guidance seeking to clarify its existing guidance on these requirements. 387Guidance for Generators: Co-location of Electricity Storage Facilities with Renewable Generation Supported under the Renewables Obligation or Feed-in Tariff Schemes, Ofgem (Dec. 14, 2017), https://www.ofgem.gov.uk/publications-and-updates/guidance-generators-co-location-electricity-storage-facilities-renewable-generation-supported-under-renewables-obligation-or-feed-tariff-schemes. Removing the regulatory barriers to the capacity market, such as the restrictions on contract duration and projects receiving subsidies, should also be considered. 388The Energy Revolution, supra note 321, at 17.

In light of the above it is clear that there are still marked barriers to storage. It is encouraging however to see the regulator taking the lead in seeking feedback on the current state of affairs. Indeed, Ofgem issued in July 2018 another new consultation on reforming access and forward-looking charging arrangements in light of the emergence of, among other technologies, storage. 389Getting More Out of Our Electricity Networks Through Reforming Access and Forward-Looking Charging Arrangements, Ofgem, (Jul. 23, 2018), https://www.ofgem.gov.uk/publications-and-updates/getting-more-out-our-electricity-networks-through-reforming-access-and-forward-looking-charging-arrangements. The consultation focused on how best to maximize the benefits of grid flexibility. Notably, it seeks input from all relevant stakeholders—from consumers as well as electricity market players. The decision on this consultation was published in December 2018, and a Significant Code Review has now been launched. 390Electricity Network Access and Forward-Looking Charging Review–Significant Code Review Launch and Wider Decision, Ofgem (Dec. 18, 2018), https://www.ofgem.gov.uk/publications-and-updates/electricity-network-access-and-forward-looking-charging-review-significant-code-review-launch-and-wider-decision.

Conclusions

The UK has made considerable progress towards meeting its 2020 targets. In 2017, the UK saw renewable energy’s share of electricity generation jump to 29%. 391Dept. for Bus., Energy, & Indus. Strategy, Digest of United Kingdom Energy Statistics (2018) [hereinafter Digest of United Kingdom Energy Statistics]. With the UK now comfortably producing one quarter of its electricity from renewables, the overall target of 15% consumption from renewables seems increasingly achievable. With regard to its energy saving target of 18% by 2020, primary energy consumption fell by 15% and final energy consumption by 11% in 2015, compared to 2007. 39228 April 2017: UK National Energy Efficiency Action Plan and Annual Report 1 (2017). Meanwhile, the UK’s greenhouse gas emissions were 43% below 1990 levels in 2017. 393How the UK is Progressing, supra note 48. The UK has met both its first and second carbon budgets, and is on track to meet its third. However, efforts must be accelerated if the UK is to meet its subsequent carbon budgets.

The UK’s energy mix has transformed in recent years, with coal generation now comprising a negligible amount of its energy requirements. In 2016, coal accounted for only 2% of total production—a record low. 394Dept. for Bus., Energy, & Indus. Strategy, UK Energy in Brief 2017 6 (2017). Meanwhile, low carbon energy sources (both nuclear and renewable) are featuring more prominently. Primary electricity sources (nuclear, and wind and solar) and bioenergy and waste accounted for 16% and 9% of total production in 2016, respectively. 395Id. Nevertheless, fossil fuels in the form of oil and gas continue to be an important source of the UK’s energy supply. In 2016, oil accounted for 42% and natural gas 32% of total production. 396Id. Yet, while nuclear is often classified as a clean energy source, there are problems associated with decommissioning and safety. Moreover, the new projects have proven to be costly and will have a long development period. Crucially therefore, renewable energy sources contributed to 29% of electricity generation in 2017. 397Digest of United Kingdom Energy Statistics, supra note 391, at 11. In 2017, renewables’ share of the overall primary energy mix actually overtook nuclear energy’s share, at 11.3%. 398 Jocelyn Timperley, Six Charts Show Mixed Progress for UK Renewables, Carbon Brief: Clear on Climate, (Jul. 30, 2018), https://www.carbonbrief.org/six-charts-show-mixed-progress-for-uk-renewables.

While the UK has considerable natural resources of its own, it is now a net importer of energy. In 2017, the UK’s net import dependency was 35.8%. 399Energy Trends: September 2018, supra note 65, at 14. Securing its energy supply will be crucial in the Brexit aftermath, and will undoubtedly be one of the primary considerations when making the decision to remain, or leave, the internal energy market. At present, Scotland is a key driver of the UK’s energy transition: thus, if the UK wishes to jointly wean itself off fossil fuels but rely on indigenous resources, it will find itself increasingly reliant on Scotland. For the time being, this arrangement may be satisfactory. But if Scotland were to become independent, as continues to be threatened, then the UK may have to rethink its energy security strategy.

The UK has a clear strategy for the transition to a low carbon economy; this is backed by a comprehensive regulatory framework for the integration of non-synchronous generation. But observers are troubled by the downward trend in green investment. The withdrawal of governmental support schemes for solar at a time of considerable market uncertainty appears to have compounded investor uncertainty. 400 Gabbatiss, supra note 207. Meanwhile, regulatory changes in 2015 appear to have created an unfriendly planning environment for onshore wind development. 401 Josh Gabbatiss, Environmental Impact of Policies that Led to Collapse of Onshore Wind was Not Considered by Government, Independent (May 6, 2018), https://www.independent.co.uk/news/uk/politics/wind-power-onshore-policies-environmental-impact-government-collapse-a8334786.html. Moreover, regulatory hurdles to the treatment of storage and demand response also remain in place. The overall picture of the UK’s energy policy is therefore one of imprecision and inconsistency; its ostensibly clear strategy is not matched by a coherent regulatory framework.

With regard to digitalization, the UK has been one of the countries at the forefront of the smart meter transition. Yet the program has not been without its challenges. There are a number of novel aspects about the UK’s approach to the roll-out, but the one that has caused perhaps the most issues for the UK has been the decision to place the roll-out in the hands of the utility suppliers. Resistance to smart meters also remains entrenched in the residential market. There have been calls for the regulator to try to understand better why the acceptance rate of smart meters is so low. 402 K. Sovacool et al., supra note 277, at 767–81. More work on this should be done in order to facilitate the smart grid transition.

The UK has therefore made progress towards establishing a smarter, more secure, and more responsive electricity grid. Decarbonization is central to its energy strategy, with renewable energy sources now taking an increasing share of both energy production and electricity generation. Meanwhile, the UK’s commitment to decentralization and digitalization underpins the moderate successes of its smart meter program. Yet the UK has made its missteps. In particular, the UK has found itself paying too much heed to the logic of the incumbent fossil fuel industry. To give but a handful of examples, the UK has cut solar subsidies at the same time as it has re-started its hydraulic fracking program. It also promotes nuclear, even as the risks of decommissioning and safety give rise to questions about nuclear energy’s clean credentials. The UK also sustains barriers to storage and DSR technologies with respect to the capacity market, allowing fossil fuels to dominate the subsidies. Finally, it has put the smart metering program in the grip of the utility incumbents, exposing the program to the dictates of profit maximization rather than grid optimization. Unfortunately, these lapses have resulted in a policy and regulatory framework that is not entirely coherent.

Moving forward, the UK must take care to consult with all stakeholders in terms of planning its future grid strategy. Ofgem continues to do good work in this respect; only a small number of its publications have been referenced in this paper, but they nonetheless give a flavor for its striking activism. In broad terms, the smart grid transition hinges on the decarbonization, digitalization, and democratization of the grid. Accordingly, the UK must consider how best to re-orientate its position so that renewable energy forms the central plank of its strategy in the years to come. Promoting green investment and righting the downward trend in investment witnessed in recent years, should therefore be a priority. The smart grid transition also represents an unprecedented opportunity to democratize the grid. However, the promised democratization of the grid will require the domestic consumer to be engaged in the transition. Thus, it will be important, with respect to the smart metering program, for the social dimension of the roll-out to be fully taken into account. The levels of apathy and discontentment outlined in Section E will pose a significant hurdle to the transition to locally based networks. In particular, therefore, the smart grid transition must focus on how to best integrate the consumer into the smart grid as an active party. To do this, it will be necessary to break with the logic of the existing market framework, and to view the consumer as a market player in their own right.

 

Footnotes

*Rafael Leal-Arcas is Jean Monnet Chaired Professor in EU International Economic Law and Professor of Law, Queen Mary University of London (Centre for Commercial Law Studies), United Kingdom. Visiting Researcher, Yale Law School. Visiting Professor, Sorbonne University Abu Dhabi (United Arab Emirates). Member, Madrid Bar; European University Institute, Ph.D.; European University Institute, M.Res.; Stanford Law School, J.S.M.; Columbia Law School, LL.M.; London School of Economics and Political Science, M.Phil.; Granada University, J.D.; Granada University, B.A. The financial help from the European Union (EU) for the writing of this Article is gratefully acknowledged as part of the WiseGRID project (grant agreement number 731205), funded by the EU’s Horizon 2020 research and innovation program. This Article has also been written with the financial support of the Erasmus+ Program of the EU, which funded my Jean Monnet Chair in EU International Economic Law (project number 575061-EPP-1-2016-1-UK-EPPJMO-CHAIR). Email: r.leal-arcas@qmul.ac.uk.Michalis Kanakakis is at the Athens University of Economics and Business. Contact: kanakakis@aueb.gr.George Thanos is at the Athens University of Economics and Business. Contact: gthanos@aueb.gr.Gemma Fearnley is a Researcher, WiseGRID project, Queen Mary University of London; Lawyer, The Government Legal Department (Government of the United Kingdom); Solicitor qualified in Scotland; LL.M, Centre for Commercial Law Studies, Queen Mary University of London; Dip.LP, The University of Glasgow; LL.B, The University of Glasgow. Contact: gemmakf@gmail.com. The research assistance of Juan Rios is acknowledged.

1 WiseGRID is a research project (number 731205) funded by the EU’s Horizon 2020 research and innovation program. Professor Dr. Rafael Leal-Arcas is one of the Principal Investigators. See generally Wisegrid, www.wisegrid.eu (last visited Feb. 11, 2020).

2The European Commission’s Science and Knowledge Service, Eur. Comm’n: EU Sci Hub, https://ec.europa.eu/jrc/en/energy-efficiency/eed-support/energy-service-companies (last updated Nov. 14, 2016).

3See generally WiseGrid, supra note 1.

4See generally Eur. Comm’n: Horizon 2020, https://ec.europa.eu/programmes/horizon2020/en (last visited Feb. 11, 2020).

5 Council Directive 2014/94, 2014 O.J. (L 307) 1, 5 (EU).

6Council of Eur. Energy Regulators (CEER), CEER Status Review on European Regulatory Approaches Enabling Smart Grids Solutions, C13-EQS-57-04, at 14, (2014) [hereinafter CEER 2014 Status Review].

7 Int’l Energy Agency, Global EV Outlook 2017: Two Million and Counting, OECD/IEA 2017.

8Id. at 6.

9 Paul Hockenos, With Norway in Lead, Europe Set for Surge in Electric Vehicles, Yale Env’t 360 (Feb. 6, 2017), http://e360.yale.edu/features/with-norway-in-the-lead-europe-set-for-breakout-on-electric-vehicles); The Int’l Council on Clean Transp. (ICCT), Eur. Vehicle Market Statistics (2015–2016).

10Eur. Environment Agency (EEA), Electric Vehicles in Europe, No. 20/2016, at 60 (2016).

11Id. at 14.

12KU Leuven Energy Inst., The Current Electricity Market Design in Europe 3 (2015).

13See CEER 2014 Status Review, supra note 6.

14See generally Residential Night Tariff, PPC, https://www.dei.gr/en/oikiakoi-pelates/timologia/oikiako-timologio-me-xronoxrewsi-oikiako-nuxterino (last visited Feb. 11, 2020).

15Smart Energy Demand Coalition, Mapping Demand Response in Europe Today 27 (2015).

16 Giorgio Castagneto et al., Regulatory Barriers to Energy Storage Deployment: The UK Perspective, 2016 RESTLESS Project 1, 2.

17See generally B.O.E. n. 310, Dec. 27, 2013 (Spain).

18See Sören Amelang, Power Grid Fees—Unfair and Opaque?, Clean Energy Wire (Jan. 26, 2017), https://www.cleanenergywire.org/factsheets/power-grid-fees-unfair-and-opaque.

19 Jason Deign, Spain’s New Self-Consumption Law Makes Batteries Impractical for Homeowners, GreenTech Media (Oct. 16, 2015), https://www.greentechmedia.com/articles/read/spanish-self-consumption-law-allows-batteries-at-a-cost.

20Smart Energy Demand Coalition, supra note 15, at 55.

21See generally B.O.E. n. 310, Dec. 27, 2013 (Spain).

22See Geert De Clereq, Run Your Dishwasher When the Sun Shines: Dynamic Power Pricing Grows, Reuters (Aug. 2, 2018, 2:53 AM), https://www.reuters.com/article/us-europe-electricity-prices-insight/run-your-dishwasher-when-the-sun-shines-dynamic-power-pricing-grows-idUSKBN1KN0L7.

23See e.g., Day-Ahead and Real-Time Energy Markets, ISO: New England, https://www.iso-ne.com/markets-operations/markets/da-rt-energy-markets/ (last visited Feb. 12, 2020).

24See Frédéric Simon, Smart Meter Woes Hold Back Digitalisation of EU Power Sector, EURACTIV (Jan. 30, 2019), https://www.euractiv.com/section/energy/news/smart-meter-woes-hold-back-digitalisation-of-eu-power-sector/.

25See generally Paolo Bertoldi, et. al, JRC Science for Policy Report: Demand Response Status in EU Member States (2016)).

26Rafael Leal-Arcas, Solutions for Sustainability: How the International Trade, Energy, and Climate Change Regimes Can Help 378 (citing Paolo Bertoldi, et. al, supra note 25, at 69).

27Smart Energy Demand Coalition, supra note 15, at 10–11.

28Id. at 10.

29Id.

30Id. at 150.

31See id. at 85.

32See id.

33Id.

34See id. at 167.

35Id. at 85.

36Id. at 131.

37See id. at 79.

38Id. at 10, 41, 45, 47, 68, 85, 131, 151.

39See id. at 72; see also id. at 155.

40Department of Energy and Climate Change, National Renewable Energy Action Plan for the United Kingdom: Article 4 of the Renewable Energy Directive 2009/28/EC, at 5 (UK) [hereinafter DECC 2010].

41Department of Energy and Climate Change, UK National Energy Efficiency Action Plan, DECC, at 87 (UK) [hereinafter DECC 2014].

42 Climate Change Act 2008, c.27, §1 (Eng.).

43See generally John Parnell, Momentum Builds for UK Government to Self-Fund New Nuclear Plants, gtm (Jan. 15, 2020), https://www.greentechmedia.com/articles/read/momentum-builds-for-uk-government-to-fund-new-nuclear-itself.

44See Sophie Hirsh, Scotland’s New Target: 100% Renewable Electricity in 2020, World Econ. Forum, (July 17, 2019), https://www.weforum.org/agenda/2019/07/scotland-wind-energy-new-record-putting-country-on-track-for-100-renewable-electricity-in-2020/.

45See What is Fracking and Why is it Controversial, BBC News (Oct. 15, 2018), https://www.bbc.com/news/uk-14432401.

46Dep’t for Bus., Energy & Indus. Strategy, Digest of United Kingdom Energy Statistics (DUKES) 2018: Main Report 1, 11 (2018) [hereinafter Digest of United Kingdom Energy Statistics].

47UK Government, 28 April 2017: UK National Energy Efficiency Action Plan and Annual Report, 1 (UK) [hereinafter UK National Energy Efficiency Action Plan].

48How the UK is Progressing, Comm. on Climate Change, https://www.theccc.org.uk/tackling-climate-change/reducing-carbon-emissions/how-the-uk-is-progressing/ (last visited Feb. 13, 2020).

49 Josh Gabbatiss, A ‘Hostile Environment’ for Renewables: Why has UK Clean Energy Investment Plummeted?, Independent (May 19, 2018, 7:14 PM), https://www.independent.co.uk/environment/uk-renewable-energy-investment-targets-wind-solar-power-onshore-a8358511.html.

50 Josh Gabbatiss, Environmental Impact of Policies that Led to Collapse of Onshore Wind Was Not Considered by Government, The Independent (May 6, 2018, 11:30 AM), https://www.independent.co.uk/news/uk/politics/wind-power-onshore-policies-environmental-impact-government-collapse-a8334786.html.

51See generally Smart Metering Implementation Programme, Smart Energy Code Co., https://smartenergycodecompany.co.uk/smip/ (last visited Feb. 13, 2020).

52 DECC 2010, supra note 40, at 5.

53Id.

54See id. at 4.

55 DECC 2014, supra note 41, at 5.

56See Simon Evans, In-Depth Q & A: The UK Becomes First Major Economy to Set Net-Zero Climate Goal, Carbon Brief: Clear on Climate (June 12, 2019, 4:18 PM), https://www.carbonbrief.org/in-depth-qa-the-uk-becomes-first-major-economy-to-set-net-zero-climate-goal.

57 Jocelyn Timperley, Six Charts Show Mixed Progress for UK Renewables, Carbon Brief: Clear on Climate (July 30, 2018, 8:00 AM), https://www.carbonbrief.org/six-charts-show-mixed-progress-for-uk-renewables.

58See id.

59Dep’t for Bus., Energy & Indus. Strategy, UK Energy in Brief 2017 1, 6. [hereinafter UK Energy in Brief 2017].

60BP Development of Two New Fields Demonstrates Remaining Potential of UKCS, OGUK, https://oilandgasuk.co.uk/bp-development-of-two-new-fields-demonstrates-remaining-potential-of-ukcs/ (last visited Oct. 18, 2019).

61UK Energy in Brief 2017, supra note 59, at 6.

62Id.

63Id.

64Id.

65Dep’t for Bus., Energy & Indus. Strategy, Energy Trends: September 2018, 5 [hereinafter Energy Trends: September 2018].

66 At the time of writing this Article.

67Energy Trends: September 2018, supra note 65, at 48.

68Id.

69Id. at 3.

70See Jillian Ambrose, Drax Owner Plans to Be World’s First Carbon-Negative Business, Guardian (Dec. 9, 2019), https://www.theguardian.com/business/2019/dec/10/drax-owner-plans-worlds-first-carbon-negative-business.

71Id.

72Drax Closer to Coal Free Future with Fourth Biomass Unit Conversion, Drax (Aug. 20, 2018), https://www.drax.com/press_release/drax-closer-coal-free-future-fourth-biomass-unit-conversion/.

73Dep’t for Bus., Energy & Indus. Strategy, Guidance on Fracking: Developing Shale Gas in the UK.

74Nuclear Power in the United Kingdom, World Nuclear Ass. (Nov. 2018), http://www.world-nuclear.org/information-library/country-profiles/countries-t-z/united-kingdom.aspx.

75Id.

76Id.

77Energy Trends: September 2018, supra note 65, at 48.

78UK Enjoyed ‘Greenest Year for Electricity Ever’ in 2017, BBC (Dec. 28, 2017), http://www.bbc.co.uk/news/uk-42495883.

79Energy Trends: September 2018, supra note 65, at 14.

80 High Level Summary of Statistics Trend Last update: Thursday, December 22, 2016 Electricity Generation, Scottish Government, https://www2.gov.scot/Topics/Statistics/Browse/Business/TrenRenEnergy (last visited Feb. 13, 2020).

81Id.

82Id.

83 See Philip Sim, Scottish Independence: Could a New Referendum Still Be Held?, BBC News (Jan. 31, 2020).

84 Scott MacNab, Nicola Sturgeon: I Won’t Call a Second Scottish Independence Vote This Year, Scotsman (Nov. 27, 2018), https://www.scotsman.com/news/politics/general-election/nicola-sturgeon-i-won-t-call-a-second-scottish-independence-vote-this-year-1-4835640.

85 Alan Martin, The UK Still Has Some Way to Go to Hit Its 2020 Renewable Energy Target, Alphr (Feb. 1, 2018), https://www.alphr.com/energy/1008375/uk-renewable-energy-progress-2020.

86UK Set to Smash Renewable Energy Targets for 2020, Solar Daily (June 1, 2018), http://www.solardaily.com/reports/UK_set_to_smash_renewable_energy_targets_for_2020_999.html.

87 DECC 2010, supra note 40, at 5.

88Digest of United Kingdom Energy Statistics, supra note 46, at 11.

89Energy Trends: September 2018, supra note 65, at 48.

90UK National Energy Efficiency Action Plan, at 1.

91Id.

92How the UK is Progressing, supra note 48.

93 Scotland Exceeds Emissions Targets–Six Years Early, BBC (June 14, 2016), https://www.bbc.co.uk/news/uk-scotland-scotland-politics-36519506.

94 ‘Record’ Year for Renewable Electricity Generation, BBC (Mar. 29, 2018), https://www.bbc.co.uk/news/uk-scotland-scotland-business-43586438.

95Single Market Progress Report: United Kingdom, Eur. Comm’n, COM (2014) 634 final, at 232 (Oct. 13, 2014).

96Open Networks Project: Overview, Energy Networks Association, http://www.energynetworks.org/electricity/futures/open-networks-project/open-networks-project-overview/ (last visited Feb. 13, 2020).

97See Number of Active Domestic Suppliers by Fuel Type (GB), Ofgem https://www.ofgem.gov.uk/data-portal/number-active-domestic-suppliers-fuel-type-gb (last updated Jan. 2020).

98Ofgem, Retail Energy Markets in 2016, at 9 (2016) [hereinafter Retail Energy Markets].

99A Beginner’s Guide to the Big 6 Energy Companies, OVO Energy, https://www.ovoenergy.com/guides/energy-guides/big-six-energy-companies.html (last visited Feb. 13, 2020).

100 Tom Käckenhoff & Philip Blenkinsop, E.ON to Tackle Npower After EU Clears Innogy Takeover, Reuters (Sep. 17, 2019), https://www.reuters.com/article/us-innogy-m-a-e-on-eu/e-on-to-tackle-npower-after-eu-clears-innogy-takeover-idUSKBN1W20S2.

101Id.

102A Beginner’s Guide to the Big 6 Energy Companies, supra note 99.

103Id.

104 Guy Chazan, Eon and RWE Pursue Radical Restructurings, Fin. Times (May 18, 2016), https://www.ft.com/content/316ce884-1cdc-11e6-a7bc-ee846770ec15.

105 Tom Käckenhoff & Philip Blenkinsop, E.ON to Tackle Npower after EU Clears Innogy Takeover, Reuters (Sept. 17, 2019), https://www.reuters.com/article/us-innogy-m-a-e-on-eu/e-on-to-tackle-npower-after-eu-clears-innogy-takeover-idUSKBN1W20S2.

106Id.

107Id.

108Id.

109 Adam Vaughan, Job Fears for Npower Staff, with Ownership Transferring to E.ON, Guardian (Dec. 28, 2018), https://www.theguardian.com/business/2018/dec/28/job-fears-for-npower-staff-with-ownership-transferring-to-eon.

110Our Company History, N. Ir. Electricity Networks (2019), https://www.nienetworks.co.uk/about-us/company-history.

111Id.

112Id.

113Id.

114 Council Directive 2009/72 art. 9 O.J. (L 211) 1.

115Utility Regulator, Retail Market Monitoring 3 (2018) [hereinafter Retail Market Monitoring].

116List of Energy Suppliers, CRU, https://www.cru.ie/home/customer-care/energy/communication/ (last visited Feb. 19, 2020).

117Retail Market Monitoring, supra note 115, at 5.

118Dep’t for Bus., Energy & Indus. Strategy, UK Energy in Brief 2018, at 8.

119Dep’t for Bus., Energy & Indus. Strategy, Energy Consumption in the UK (2018).

120Id.

121Id.

122Id, at 5

123Energy Trends: September 2018, supra note 65, at 3.

124Utility Regulator, Retail Market Monitoring: 2016, at 6 (2017).

125Id.

126Dep’t for Econ.: Northern Ireland Stat. & Res. Agency, Energy in Northern Ireland 2018, at 36 (2018).

127Id.

128Id. at 29.

129Map of the UK’s Electricity Supply System Network Grid, British Bus. Energy (Apr. 2, 2016), https://britishbusinessenergy.co.uk/electricity-supply-system/.

130 Kirstie Massie & Katy Norman, United Kingdom, White & Case LLP, 3, https://www.whitecase.com/sites/whitecase/files/files/download/publications/getting-deal-through-electricity-regulation-2018-united-kingdom.pdf (last visited Feb. 19, 2020).

131See The GB Electricity Transmission Network, Ofgem, https://www.ofgem.gov.uk/electricity/transmission-networks/gb-electricity-transmission-network (last visited Feb. 19, 2020).

132See Electricity Interconnectors, Ofgem, https://www.ofgem.gov.uk/electricity/transmission-networks/electricity-interconnectors (last visited Feb. 19, 2020).

133Communication from the Commission to the European Parliament and the Council: Achieving the 10% Electricity Interconnection Target, at 5, COM (2015) 82 final (Feb. 25, 2015).

134Id.

135EirGrid Group, Innovative Partnerships for a Brighter Tomorrow 15 (2017).

136See generally id.

137Id. at 1.

138Id. at 15.

139See Transmission System 400, 275, 220 and 100kV September 2016, EirGrid Group (2016), http://www.eirgridgroup.com/site-files/library/EirGrid/EirGrid-Group-Transmission-System-Geographic-Map-Sept-2016.pdf.

140See EirGrid Group, supra note 6–9.

141See Interconnection, SONI, http://www.soni.ltd.uk/customer-and-industry/interconnection/ (last visited Feb. 19, 2020).

142Id.

143NIE Networks, Distribution Generation Application and Offer Process Statement 1 (2018).

144Id.

145Find Your Gas & Electricity Distributors, Selectra (Aug. 26, 2019), https://selectra.co.uk/energy/guides/distribution.

146Id.

147Dep’t for Bus., Energy & Indus. Strategy, The Clean Growth Strategy: Leading the Way to a Low Carbon Future 5 (2017) [hereinafter The Clean Growth Strategy].

148See generally id.

149See id. at 12–16.

150See id. at 17.

151Ofgem, Our Strategy for Regulating the Future Energy System, (2017).

152See generally id.

153See Dep’t of Enterprise, Trade and Inv., Energy: A Strategic Framework for Northern Ireland (2010).

154See id.

155 Northern Ireland Assembly: Comm. for the Exec. Office, Report on the Executive’s Draft Program for Government 2016-21, at 6 (2016).

156 Id. at 19.

157See I-SEM Will Continue in No-Deal Brexit, Argus Media (Mar. 14, 2019), https://www.argusmedia.com/en/news/1866067-isem-will-continue-in-nodeal-brexit.

158See Brexit: EU and UK Reach Deal but DUP Refuses Support, BBC News (Oct. 17, 2019), https://www.bbc.com/news/uk-politics-50079385.

159 Adam Vaughan, UK Green Energy Investment Halves After Policy Changes, Guardian (Jan. 16, 2018), https://www.theguardian.com/business/2018/jan/16/uk-green-energy-investment-plunges-after-policy-changes.

160 James Tapper, Green Energy Feels the Heat as Subsidies go to Fossil Fuels, Guardian (June 23, 2018), https://www.theguardian.com/environment/2018/jun/23/green-energy-subsidies-community-projects-fossil-fuels.

161 Adam Vaughan, Fast-Track Fracking Plan by the Government Prompts Criticism, Guardian (May 17, 2018), https://www.theguardian.com/business/2018/may/17/fast-track-fracking-plan-by-uk-government-prompts-criticism.

162 Phil MacDonald, Subsidies to UK Coal Continue Despite Phase-Out Pledge, Sandbag: Smarter Climate Policy (Sept. 28, 2017), https://sandbag.org.uk/2017/09/28/7807/.

163 Case T-793/14, Tempus Energy Ltd. and Tempus Energy Tech. Ltd. v. European Comm’n supported by UK, 2013 E.C.R. 790.

164 Tapper, supra note 160.

165 Adam Vaughan, Subsidy-Free Renewable Energy Projects Set to Soar in UK, Analysts Say, Guardian (Mar. 20, 2018), https://www.theguardian.com/business/2018/mar/20/uk-subsidy-free-renewable-energy-projects-set-soar-aurora-energy-research-analysts.

1662016 UK Provisional Greenhouse Gas Emissions, Nat’l Stat. (Mar. 30, 2017), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/604327/2016_Provisional_emissions_statistics_one_page_summary.pdf.

167The Clean Growth Strategy, supra note 147, at 5.

168Energy Trends: September 2018, supra note 65, at 3.

169See generally The Clean Growth Strategy, supra note 147.

170 Political Declaration Setting Out the Framework for the Future Relationship Between the European Union and the United Kingdom, ¶¶ 66–67.

171Dep’t for Bus., Energy & Indus. Strategy, Leaving the EU: Negotiation Priorities for Energy and Climate Change Policy, 2016-17, HC 909, at 19 (UK) [hereinafter Leaving the EU].

172 Political Declaration Setting Out the Framework for the Future Relationship Between the European Union and the United Kingdom, ¶ 78.

173Ten Years of the Climate Change Act, Comm. on Climate Change, https://www.theccc.org.uk/our-impact/ten-years-of-the-climate-change-act/ (last visited Feb. 19, 2020).

174 Jennifer Rankin, Activists Demand UK Environment Watchdog in Brexit Trade Deal, Guardian (Nov. 26, 2018), https://www.theguardian.com/politics/2018/nov/26/post-brexit-trade-deal-must-guarantee-uk-environment-watchdog-green-groups.

175 James Tapper, UK’s Green Watchdog Will Be Powerless Over Climate Change Post-Brexit, Observer (Sept. 2, 2018), https://www.theguardian.com/environment/2018/sep/02/green-watchdog-powerless-climate-change-post-brexit.

176 Northern Ireland Affairs Comm., Electricity Sector in Ireland, 2016-17, HC 51, at 6 (2017).

177Id.

178Id.

179Id.

180See id. at 51.

181See id. at 8–9.

182See id.

183See id. at 8.

184Electricity Regulation: United Kingdom, Getting the Deal Through (Oct. 2019), https://gettingthedealthrough.com/area/12/jurisdiction/22/electricity-regulation-2020-united-kingdom/.

185Id.

186Id.

187Northern Ireland Affairs Comm., supra note 176, at 6.

188Electricity Regulation: Ireland, supra note 184.

189 Electricity Act 1989, c. 29 (Eng.).

190Id.

191 Massie & Norman, supra note 130.

192See Winter et al., Comparison of the Planning Systems in the Four UK Countries, House of Commons Library 4 (Jan. 20, 2016), https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7459.

193Id. at 5.

194 Electricity Act 1989, c. 29 (Eng.).

195 Planning Act 2008, c. 29 (Eng.).

196 Specifically, the Onshore Wind Generating Stations (Exemption) (England and Wales) Order 2016 (S.I. 2016/21) as amended by the Onshore Wind Generating Stations (Exemption) (England and Wales) (Amendment) Order 2016 (S.I. 2016/450) also removed the requirement for a Section 36 consent for onshore wind generation.

197 Massie & Norman, supra note 130.

198 Planning (Wales) Act 2015, c. 19, § 62D.

199See Elfyn Henderson, A New Infrastructure Consenting Process For Wales, In Brief: Senedd Research, Nat’l Assembly for Wales (June 7, 2018).

200See Town and County Planning (Scotland) Act 1997, as amended by the Planning etc. (Scotland) Act 2006.

201Energy Infrastructure, Scottish Gov’t, https://www2.gov.scot/Topics/Business-Industry/Energy/Infrastructure/Energy-Consents (last visited Feb. 20, 2020).

202Id.

203 The Town and Country Planning (General Permitted Development) (Domestic Microgeneration) (Scotland) Amendment Order 2010 (ASP 27), § 2(5)(a).

204Planning Permission: Wind Turbines, Welsh Gov’t, https://beta.gov.wales/planning-permission-wind-turbines (last visited Feb. 20, 2020).

205 The Town and Country Planning (General Permitted Development) (Amendment) (England) Order 2011, c. 2, § E.2.

206 Renewable Energy: Wind Farms, Portal Planning, https://www.planningni.gov.uk/index/advice/advice_apply/advice_renewable_energy/renewable_wind_farms.htm (last visited Feb. 20, 2020).

207 Josh Gabbatiss, A ‘Hostile Environment’ for Renewables: Why Has UK Clean Energy Investment Plummeted?, Independent (May 19, 2018), https://www.independent.co.uk/environment/uk-renewable-energy-investment-targets-wind-solar-power-onshore-a8358511.html.

208 Massie & Norman, supra note 130.

209Id.

210Distribution Generation Application and Offer Process Statement, NIE Networks 1 (2008).

211Id.

212About the RO, OFGEM, https://www.ofgem.gov.uk/environmental-programmes/ro/about-ro (last visited Oct. 12, 2019).

213Id.

214RO Closure, OFGEM, https://www.ofgem.gov.uk/environmental-programmes/ro/about-ro/ro-closure (last visited Feb. 20, 2020).

215Id.

216 Massie & Norman, supra note 130; see also Electricity Market Reform: Contracts for Difference, Dep’t for Bus., Energy & Indus. Strategy, https://www.gov.uk/government/collections/electricity-market-reform-contracts-for-difference (last updated Feb. 8, 2017).

217See generally Electricity Market Reform: Contracts for Difference, supra note 216.

218 Catapult Energy Systems, GB Energy Industry, ch. 6 (2019).

219Dep’t for Bus., Energy & Indus. Strategy, Contracts for Difference and Capacity Market Scheme Update 2017, 10 (2017).

220Id. at 4 (the second CfD round saw sixteen contracts being signed in connection with ten projects; these will provide over 3GW of new renewable generation capacity from 2021/22).

221 Priyanka Shrestha, Remote Island Wind Projects Able to Compete in Renewable Auction, Energy Live News (June 11, 2018), https://www.energylivenews.com/2018/06/11/remote-island-wind-projects-able-to-compete-in-renewable-auction/ (other than wind turbine projects on “remote islands,” which are now accepted following a relaxation of the rules).

222 Liam Stoker, Let Solar Back Into CfDs, Energy UK Urges Government, Solar Power Portal (May 24, 2018), https://www.solarpowerportal.co.uk/news/let_solar_back_into_cfds_energy_uk_urges_government.

223Frequently Asked Questions, Contracts for Difference (CfD), https://www.cfdallocationround.uk/faqs (last visited Oct. 12, 2019).

224Delivering Clean Growth: Progress Against Meeting Our Carbon Budgets–The Government Response to the Committee on Climate Change, HM Gov’t (Oct. 2018).

225 Massie & Norman, supra note 130; see also Capacity Market (CM) Rules, OFGEM, https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules (last visited Oct. 12, 2019).

226See Thomas Muinzer, Electricity Bills Could Rise if Brexit Threatens Ireland’s Unique Energy Agreement, Irish Examiner (Nov. 30, 2018), https://www.irishexaminer.com/breakingnews/views/analysis/electricity-bills-could-rise-if-brexit-threatens-irelands-unique-energy-agreement-889072.html.

227Feed-in Tariffs (FIT), OFGEM, https://www.ofgem.gov.uk/environmental-programmes/fit (last visited Oct. 12, 2019).

228See Feed-in-Tariffs, Ovo Energy, https://www.ovoenergy.com/help/feed-in-tariffs (last visited Feb. 20, 2020).

229 Vaughan, supra note 165.

230 Georgios Maroulis, Feed-in-Tariff, RES Legal, http://www.res-legal.eu/search-by-country/united-kingdom/single/s/res-e/t/promotion/aid/feed-in-tariff-5/lastp/203/ (Jan. 5, 2019).

231About the FIT Scheme, OFGEM, https://www.ofgem.gov.uk/environmental-programmes/fit/about-fit-scheme (last visited Oct. 12, 2019).

232 Adam Vaughan, Solar Households Expected to Give Away Power to Energy Firms, Guardian (Dec. 18, 2018), https://www.theguardian.com/business/2018/dec/18/solar-power-energy-firms-government.

233Electricity Network Access and Forward-Looking Charging Review–Significant Code Review Launch and Wider Decision, OFGEM, https://www.ofgem.gov.uk/publications-and-updates/electricity-network-access-and-forward-looking-charging-review-significant-code-review-launch-and-wider-decision (last visited Oct. 12, 2019).

234 Adam Vaughan, Energy Shakeup Could Cut Bills by £45 a Year, Guardian (Dec. 18, 2018, 4:47 AM), https://www.theguardian.com/money/2018/dec/18/energy-bills-ofgem-national-grid.

235 David Hirst, Carbon Price Floor (CPF) and the Price Support Mechanism, House of Commons Library 3 (Jan. 8, 2018), https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN05927.

236Res Legal, Renewable Energy Policy Database and Support—National Profile: United Kingdom 7 (2015).

237Committee on Climate Change, Reducing Emissions in Northern Ireland 30 (2019).

238Factsheet: The Renewable Heat Incentive Domestic or Non-Domestic?, OFGEM, https://www.ofgem.gov.uk/sites/default/files/docs/drhi_factsheet_therhidomornondom_v2_0_mar_2016_web.pdf (last visited Oct. 12, 2019).

239Dep’t for Bus., Energy & Indus. Strategy, The Renewable Heat Incentive: A Reformed Scheme, 5 (2016).

240See Need-to-Know Guide: Renewable Heat Incentive (RHI) Scheme, BBC News (Nov. 7, 2017), https://www.bbc.com/news/uk-northern-ireland-38307628.

241The Future of the Northern Ireland Non-Domestic Renewable Heat Incentive Scheme, Dep’t of the Econ. (Jan. 31, 2019), https://www.economy-ni.gov.uk/consultations/future-northern-ireland-non-domestic-renewable-heat-incentive-scheme.

242Renewable Heat Incentive Inquiry: Terms of Reference, Dep’t of Fin. (Jan. 27, 2017), https://www.rhiinquiry.org/sites/rhiinquiry.org/files/media-files/rhi-inquiry-terms-of-reference.pdf.

243Green Deal: Energy Saving for Your Home, GOV.UK, https://www.gov.uk/green-deal-energy-saving-measures (last visited Oct. 12, 2019).

244See The Green Deal, Which?, https://www.which.co.uk/reviews/home-grants/article/home-grants/the-green-deal (last visited Feb. 20, 2020).

245Id.

246See generally Dep’t for Bus., Energy & Indus. Strategy, Call for Evidence—Green Deal Framework.

247Update on Northern Ireland Sustainable Energy Programme, Util. Regulator (June 4, 2018), https://www.uregni.gov.uk/news-centre/update-northern-ireland-sustainable-energy-programme-0.

248Energy Technology List (ETL), GOV.UK, https://www.gov.uk/guidance/energy-technology-list (last updated Mar. 6, 2019).

249See Enhanced Capital Allowances in Enterprise Zones, Tax J., https://www.taxjournal.com/articles/enhanced-capital-allowances-enterprise-zones-20072016 (last visited Feb. 20, 2020).

250Renewable Transport Fuel Obligation, Dep’t for Transport (Nov. 5, 2012), https://www.gov.uk/guidance/renewable-transport-fuels-obligation.

251Id.

252See id.

253Low-Emission Vehicles Eligible for a Plug-in Grant, GOV.UK, https://www.gov.uk/plug-in-car-van-grants (last visited Oct. 12, 2019).

254 Gwyn Topham, Scrapping UK Grants for Hybrid Cars ‘Astounding’, Says Industry, Guardian (Oct. 12, 2018), https://www.theguardian.com/environment/2018/oct/12/scrapping-uk-grants-for-hybrid-cars-astounding-says-industry.

255 David Hirst, Carbon Price Floor (CPF) and the Price Support Mechanism (2018).

256 Richard Partington, Darling and Howard Back Call for Post-Brexit Carbon Tax, Guardian (Oct. 10, 2018, 7:01 PM), https://www.theguardian.com/business/2018/oct/10/darling-and-howard-back-call-for-post-brexit-carbon-tax.

257Overseas Electricity Interconnection, Houses of Parliament: Parliamentary Off. of Sci. & Tech, 5, n. 569 (2018).

258 Dieter Helm, Cost of Energy Review at xi (2017).

259See generally id.

260The EU Was Dependent on Energy Imports for Slightly Over Half of its Consumption in 2014, Eurostat (Feb. 4, 2016), http://ec.europa.eu/eurostat/documents/2995521/7150363/8-04022016-AP-EN.pdf/c92466d9-903e-417c-ad76-4c35678113fd.

261Id.

262UK Energy: How Much, What Type and Where From?, Off. for Nat’l Stat., (Aug. 15, 2016), https://visual.ons.gov.uk/uk-energy-how-much-what-type-and-where-from/.

263 Jason Mann, Brexit and Electricity Interconnectors, Energy Pol’y Res. Group (May 12, 2018), https://www.eprg.group.cam.ac.uk/wp-content/uploads/2018/05/J.-Mann.pdf.

264Cross-Border Interconnection, Dep’t for Econ., https://www.economy-ni.gov.uk/articles/cross-border-interconnection (last visited Oct. 10, 2019).

265Id.

266North South Interconnector, Sys. Operator for Northern Ireland, http://www.soni.ltd.uk/__uuid/2845daef-b91b-4a2e-9421-4ce38622052e/ (last visited Oct. 10, 2019).

267 Suzanna Hinson & Sara Priestley, Brexit: Energy and Climate Change, House of Commons Library 11 (Sep. 5, 2019).

268System Operability Framework 2016, Nat’l Grid, https://www.nationalgrideso.com/sites/eso/files/documents/8589937942-SOF%202016%20-%20Launch%20Event%20Slides%20-%20Key%20Messages%20and%20Insights.pdf (last visited Oct. 10, 2019).

269Dep’t for Bus., Energy & Indus. Strat., Updated Energy and Emissions Projections 2017, at 35 (2018).

270 The Impact of Brexit on the EU Energy System, Eur. Parl. Doc. (COM 614.181) 14 (2017).

271Leaving the EU, supra note 171, at 23.

272 Antony Froggatt, et al., Staying Connected: Key Elements for UK-EU27 Energy Cooperation After Brexit, 2017 Chatham House: Royal Inst. of Int’l Aff. 3, 22–23, 50–51.

273 Dep’t for Bus., Energy & Indus. Strategy, Trading Electricity From 1 January 2021, GOV.UK, https://www.gov.uk/government/publications/trading-electricity-if-theres-no-brexit-deal/trading-electricity-if-theres-no-brexit-deal (last visited Feb. 24, 2020).

274Smart Meters Explained, Smart Energy GB, https://www.smartenergygb.org/en/about-smart-meters (last visited Feb. 24, 2020).

275Id.

276Id.

277 Benjamin K. Sovacool et al., Vulnerability and Resistance in the United Kingdom’s Smart Meter Transition, 109 Energy Pol’y 767, 772 (2018).

278Agency for the Cooperation of Energy Regulators, Energy Regulation: A Bridge to 2025 Conclusions Paper 21 (2014).

279 Dieter Helm, Not So Smart–What has Gone Wrong with the Smart Meter Program and How to Fix it 2 (Energy Futures Network Paper 23, 2017).

280 Sovacool et al., supra note 277, at 769.

281Id. at 767.

282 Helm, supra note 279, at 4.

283 Sovacool et al, supra note 277 at 772.

284Id. at 773.

285Press Release, The Big Deal, Smart Meter Rollout Could Cost £1 Billion More Than Predicted, Big Deal (Feb. 2, 2017), https://blog.thebigdeal.com/total-cost-smart-meter-rollout-massive-12-billion/.

286Id.

287Dep. for Bus., Energy & Indus. Strategy, Smart Meters Bill: Overview and Questions & Answers 4 (2017).

288 Sovacool et al., supra note 277, at 774.

289Id.

290Meter Replacement Programme, Northern Ireland Electricity Networks, https://www.nienetworks.co.uk/meterupdate (last visited Oct. 18, 2019).

291Pöyry, Roadmap for Flexibility Services to 2030: A Report to the Committee on Climate Change 3 (2017).

292HM Gov. & Ofgem, Upgrading Our Energy System: Smart Systems and Flexibility Plan 1, 3 (2017) [hereinafter Upgrading Our Energy System].

293HM Gov. & Ofgem, Upgrading Our Energy System: Smart Systems and Flexibility Plan: Progress Update 3 (2018).

294HM Gov., The Clean Growth Strategy: Leading the Way to a Low Carbon Future 45 (2017).

295HM Gov., Industrial Strategy: Building a Britain Fit for the Future 45 (2017).

296Funding for Innovative Smart Energy Systems, GOV.UK, https://www.gov.uk/guidance/funding-for-innovative-smart-energy-systems (last update June 20, 2019).

297Utility Week & CGI, Embracing Flexibility: Transforming the Power System by 2030, 17–19 (2018).

298Id. at 5.

299Id.

300Id. 

301The Energyst, Demand Side Response: Aligning Risk and Reward: 2018 Report, (2018).

302National Grid ESO, Demand Side Response (DSR), https://www.nationalgrideso.com/balancing-services/demand-side-response-dsr (last visited Feb. 24, 2020).

303Independent Aggregators and Access to the Energy Market–Ofgem’s View, Ofgem, https://www.ofgem.gov.uk/publications-and-updates/independent-aggregators-and-access-energy-market-ofgem-s-view (last visited Feb. 24, 2020).

304UK Power Networks, Residential Demand Side Response for Outage Management and as an Alternative to Network Reinforcement 2 (2014).

305Balancing Services, National Grid ESO, https://www.nationalgrideso.com/balancing-services (last visited Feb. 24, 2020).

306National Grid, Wider Access to the Balancing Mechanism Roadmap 8 (2018).

307Short Term Operating Reserve (STOR), National Grid ESO, https://www.nationalgrideso.com/balancing-services/reserve-services/short-term-operating-reserve-stor?overview (last visited Feb. 24, 2020).

308Reserve Services, National Grid ESO, https://www.nationalgrideso.com/balancing-services/reserve-services (last visited Feb. 24, 2020).

309Firm Frequency Response (FFR), National Grid ESO, https://www.nationalgrideso.com/balancing-services/frequency-response-services/firm-frequency-response-ffr?overview (last visited Feb. 24, 2020).

310Id.

311 The following section is accurate as of the time of writing, December 2018. The Capacity Market restarted in October of 2019.

312Ofgem, Capacity Market (CM) Rules, https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules (last visited Oct. 18, 2019).

313 Massie & Norman, supra note 130.

314Id.

315Dep. for Bus., Energy & Indus. Strategy, Contracts for Difference and Capacity Market Scheme Update 4 (2017).

316Id.

317Id.

318See generally Electricity: The Capacity Market Rules 2014.

319See Capacity Market Standstill: The Perfect Time to Move Forwards, SmartestEnergy (July 2, 2019), https://smartestenergy.com/info-hub/blog/capacity-market-standstill-the-perfect-time-to-move-forwards/.

320See Electricity: The Capacity Market Rules 2014, supra note 318, at 51 (defining “Applicant Credit Cover”).

321House of Commons: Energy & Climate Change Committee, The Energy Revolution and Future Challenges for UK Energy and Climate Change Policy: Third Report of Session 2016–17, at 17 [hereinafter The Energy Revolution].

322 B. Coyne, Should Ofgem Consider Derating DSR Plus Battery Storage? Aggregators Weigh In, Energyst (Mar. 23, 2018), https://theenergyst.com/ofgem-right-consider-derating-capacity-market-dsr-aggregators-weigh/.

323 Case T-793/14, Tempus Energy Ltd. v. European Comm’n, ECLI:EU:T:2018:790, ¶ 37.

324Id.

325HM Gov., Delivering Clean Growth: Progress Against Meeting our Carbon Budgets–The Government Response to the Committee on Climate Change 23 (2018).

326Demand Side Management (DSM), EirGrid Group, http://www.eirgridgroup.com/customer-and-industry/becoming-a-customer/demand-side-management/ (last visited Feb. 24, 2020).

327Flexibility on Our Networks, ESB Networks, https://www.esbnetworks.ie/who-we-are/innovation/our-innovation-strategy/flexibility-on-our-networks (last visited Feb. 24, 2020).

328Capacity Remuneration Mechanism, Utility Regulator, https://www.uregni.gov.uk/capacity-remuneration-mechanism-0 (last visited Feb. 24, 2020).

329 David Pratt, Demand Response Facing De-Rating in Irish Capacity Market, Current (June 8, 2019), https://www.current-news.co.uk/news/demand-response-facing-de-rating-in-irish-capacity-market##targetText=David%20Pratt&targetText=Demand%20side%20response%20in%20the,the%20country’s%20electricity%20market%20authority.

330See State Aid: Commission Approves Joint Capacity Mechanism for Ireland and Northern Ireland, European Commission (Nov. 24, 2017), https://ec.europa.eu/commission/presscorner/detail/en/IP_17_4944.

331 Case T793/14, Tempus Energy Ltd. v. European Comm’n, ECLI:EU:T:2018:790, ¶ 37.

332See Future of Balancing Services, National Grid ESO, https://www.nationalgrideso.com/publications/future-balancing-services (last visited Mar. 2, 2020).

333 The Data Protection Act 1998, c. 29 (UK).

334 Council Regulation 2016/679, O.J. (L 119) 1.

335 Data Protection Act 2018, c. 12 (U.K.).

336Guide to Data Protection, ICO, https://ico.org.uk/for-organisations/guide-to-data-protection/ (last visited Mar. 2, 2020).

337Id.

338Ofgem, Access to Half-Hourly Electricity Data for Settlement Purposes 13–14 (2018) [hereinafter Access to Half-Hourly Electricity Data].

339Gas and Electricity Mkts. Authority, Standard Conditions of the Electricity Distribution Licence 53 (Aug. 25, 2017), https://epr.ofgem.gov.uk/Content/Documents/Electricity%20Distribution%20Consolidated%20Standard%20Licence%20Conditions%20-%20Current%20Version.pdf.

340Id.

341Ofgem, Smart Meters: Distribution Network Operators Privacy Plans, https://www.ofgem.gov.uk/electricity/retail-market/metering/transition-smart-meters/smart-meters-distribution-network-operators-privacy-plans (last visited Nov. 3, 2019).

342See Department of Energy & Climate Change, Smart Metering: Data Access and Privacy (2012).

343See id. at 14–17.

344See generally Dept. for Bus., Energy & Indus. Strategy, Smart Metering Implementation Programme (2018).

345Id.

346Id. at 9–10.

347See Smart Meters Act 2018, c. 14 (UK).

348See id.

349Access to Half-Hourly Electricity Data, supra note 338, at 5.

350See id. at 28–37.

351Access to Half-Hourly Electricity Data, supra note 338, at 13–14.

352 House of Parliament: Off. of Sci. & Tech., Electric Vehicles: Postnote No. 265, 2010 (U.K.).

353 Office for Low Emission Vehicles, GOV.UK, https://www.gov.uk/government/organisations/office-for-low-emission-vehicles (last visited Feb. 24, 2020).

354Energy UK, The Electric Vehicle Revolution: A Report from Energy UK 4 (2017).

355£30 Million Investment in Revolutionary V2G Technologies, GOV.UK, https://www.gov.uk/government/news/30-million-investment-in-revolutionary-v2g-technologies. (last visited Feb. 24, 2020).

356 Automated and Electric Vehicles Act 2018, c. 18 (UK).

357See The Alternative Fuels Infastructure Regulations 2017, No. 897 (UK).

358See Charging Infastructure Investment Fund, GOV.UK, https://www.gov.uk/government/publications/charging-infrastructure-investment-fund (last visited Feb. 24, 2020).

359Details of the Operation of the Charging Infastructure Investment Fund, GOV.UK (Sept. 2019), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/834758/Details_of_the_operation_of_the_CIIF.pdf.

360See generally Off. for Low Emission Vehicles, Customer Guidance: Electric Vehicle Homecharge Scheme (2019),

361See Off. for Low Emission Vehicles, Workplace Charging Scheme Guidance for Applicants, Installers and Manufacturers 2 (2019).

362See Office for Low Emission Vehicles, Ultra Low Emission Taxi Infrastructure Scheme: Winners, (2018).

363Low-Emission Vehicles Eligible for a Plug-in Grant, GOV.UK, https://www.gov.uk/plug-in-car-van-grants (last visited Feb. 24, 2020).

364 Gwyn Topham, Scrapping UK Grants for Hybrid Cars ‘Astounding’, Says Industry, Guardian, 12 Oct. 12, 2018, https://www.theguardian.com/environment/2018/oct/12/scrapping-uk-grants-for-hybrid-cars-astounding-says-industry (last visited Nov. 3, 2019).

365Id.

366See generally National Infrastructure Commission, National Infrastructure Assessment (2018).

367See Energy Taskforce, Energising Our Electric Vehicle Transition.

368See Ofgem Proposals a Good First Step to Preparing the UK for More Electric Vehicles, National Infastructure Commission (July 23, 2018), https://www.nic.org.uk/news/ofgem-proposals-a-good-first-step-to-preparing-the-uk-for-more-electric-vehicles/.

369National Grid, Future Energy Scenarios: System Operator 3 (2018).

370Id.

371 Michael Holder, BNEF: Global Energy Storage Market to Double Six Times by 2030, BusinessGreen, (Nov. 22, 2017), https://www.businessgreen.com/bg/news/3021679/bnef-global-energy-storage-market-to-double-six-times-by-2030.

372Aurora: Smart Grids and Storage Present £6bn Opportunity, BusinessGreen (Oct. 12, 2018), https://www.businessgreen.com/bg/news/3064397/smart-grids-and-storage-present-gbp6bn-opportunity-through-to-2030.

373 Andy Colthorpe, UK Battery Storage to Enjoy ‘Explosive Growth’ to 2022, Energy Storage News (Feb. 14, 2018), https://www.energy-storage.news/news/uk-battery-storage-to-enjoy-explosive-growth-to-2022.

374National Grid, System Needs and Products Strategy (2017).

375Upgrading Our Energy System, supra note 292.

376GE and Arenko to Build One of the World’s Largest Energy Storage Facilities in the UK, GE News Room (Feb. 5, 2018), https://www.genewsroom.com/press-releases/ge-and-arenko-build-one-world%E2%80%99s-largest-energy-storage-facilities-uk-284222.

377 K. Ross, Largest Battery Storage Project in UK is Unveiled, Power Engineering Int’l (Jul. 9, 2018), https://www.powerengineeringint.com/articles/2018/07/largest-battery-storage-project-in-uk-is-unveiled.html.

378 A. Colthorpe, London’s BESS Targets 100MW with ‘Landmark’ US$40m Santander Investment, Energy Storage News (Jan. 15, 2018), https://www.energy-storage.news/news/londons-bess-targets-100mw-with-landmark-us40m-santander-investment.

379Nissan launches Nissan Energy Solar: The Ultimate All-in-One Energy Solution for UK Homes, Nissan News (Jan. 18, 2018), https://uk.nissannews.com/en-GB/releases/release-426215639.

380 Annabel Andrews, Moixa Launches Its Biggest Domestic Battery at 4.8kWh, New Power (Oct. 10, 2018), https://www.newpower.info/2018/10/moixa-launches-its-biggest-domestic-battery-at-4-8kwh/.

381See The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001, No. 3720, art. 2, ¶ 2 (d)(i) (UK).

382The Energy Revolution, supra note 321, at 11.

383 Andrew Burgess, Re-thinking the Energy System, Ofgem (Jul. 31, 2017), https://www.ofgem.gov.uk/news-blog/our-blog/re-thinking-energy-system.

384Clarifying the Regulatory Framework for Electricity Storage: Licensing, Ofgem (Oct. 2, 2018), https://www.ofgem.gov.uk/publications-and-updates/clarifying-regulatory-framework-electricity-storage-licensing.

385The Energy Revolution, supra note 321, at 10–11.

386Clarifying the Regulatory Framework for Electricity Storage: Licensing, supra note 384.

387Guidance for Generators: Co-location of Electricity Storage Facilities with Renewable Generation Supported under the Renewables Obligation or Feed-in Tariff Schemes, Ofgem (Dec. 14, 2017), https://www.ofgem.gov.uk/publications-and-updates/guidance-generators-co-location-electricity-storage-facilities-renewable-generation-supported-under-renewables-obligation-or-feed-tariff-schemes.

388The Energy Revolution, supra note 321, at 17.

389Getting More Out of Our Electricity Networks Through Reforming Access and Forward-Looking Charging Arrangements, Ofgem, (Jul. 23, 2018), https://www.ofgem.gov.uk/publications-and-updates/getting-more-out-our-electricity-networks-through-reforming-access-and-forward-looking-charging-arrangements.

390Electricity Network Access and Forward-Looking Charging Review–Significant Code Review Launch and Wider Decision, Ofgem (Dec. 18, 2018), https://www.ofgem.gov.uk/publications-and-updates/electricity-network-access-and-forward-looking-charging-review-significant-code-review-launch-and-wider-decision.

391Dept. for Bus., Energy, & Indus. Strategy, Digest of United Kingdom Energy Statistics (2018) [hereinafter Digest of United Kingdom Energy Statistics].

39228 April 2017: UK National Energy Efficiency Action Plan and Annual Report 1 (2017).

393How the UK is Progressing, supra note 48.

394Dept. for Bus., Energy, & Indus. Strategy, UK Energy in Brief 2017 6 (2017).

395Id.

396Id.

397Digest of United Kingdom Energy Statistics, supra note 391, at 11.

398 Jocelyn Timperley, Six Charts Show Mixed Progress for UK Renewables, Carbon Brief: Clear on Climate, (Jul. 30, 2018), https://www.carbonbrief.org/six-charts-show-mixed-progress-for-uk-renewables.

399Energy Trends: September 2018, supra note 65, at 14.

400 Gabbatiss, supra note 207.

401 Josh Gabbatiss, Environmental Impact of Policies that Led to Collapse of Onshore Wind was Not Considered by Government, Independent (May 6, 2018), https://www.independent.co.uk/news/uk/politics/wind-power-onshore-policies-environmental-impact-government-collapse-a8334786.html.

402 K. Sovacool et al., supra note 277, at 767–81.