How will the EU smart grid transform UK business electricity?

The move to a smart grid will have massive changes in the way commercial electricity is supplied and consumed. Businesses should get ready for these changes now.


What is a smart grid?

To bring electricity into the 21st century, a ‘smart grid’ uses computer-controlled two-way communication technology and computer processing to link power plants, renewables generation like solar and wind, storage facilities like pumped hydro, and consumer and business users of electricity.

By better matching demand and usage, a smart grid can increase efficiency, meaning that the amount of surplus electricity can be reduced and the unwieldly turning on or off of power generators can be avoided.

Renewable energy

Wind power, solar and hydropower energy cannot be turned on or off at will so a smart grid is needed to address the inevitable gluts or droughts of renewable electricity. The growing popularity of solar panels and other forms of small-scale renewables, UK SMEs will become net power generators, at least for part of the time.

The nature of power generation is rapidly changing with an increasing proportion of ‘green energy’ and users becoming producers. Usage is also evolving through smart meters and better energy efficiency. Both supply and demand side markets need to become more flexible.

Energy management

Building such a system is a priority for the EU. Miguel Arias Cañete, EU Commissioner for Climate Action & Energy, said that “Innovative smart grids are central to [the] vision of … an integrated energy market”, for making the EU “world number one in renewables”, and ensuring that energy supply can meet demand.

“They allow energy to keep flowing where and when it’s needed, they make the best use of renewable energy sources, and they can keep infrastructure costs and … energy bills down. We know smart grids work. We have seen that they can reduce the infrastructure capacity needed to meet demand by up to 30%.”

Nevertheless, there are regulatory, technological, financial, or organisational hurdles to overcome.

The Distribution System will have to evolve using a variety of solutions, including storage and demand management. The latter alone has the potential to save €100 billion per year, almost €200 for every citizen in Europe. Better interconnection between countries, as is already beginning to happen, will also be important.

Smart grid to smart meter

Cañete underlined the important of electricity smart metering to the smart grid: “Coupled with smart metering systems, smart grids help consumers adapt their energy usage to different energy prices throughout the day and save money on their energy bills by consuming more energy in lower price periods.”

He called for “timely roll-out of fit-for-purpose smart metering systems”, aiming to cover almost three quarters of European households and businesses by 2020.

Smarter grid solutions

To companies searching for cheaper business electricity, the development of a Europe-wide smart grid potentially offers a secure, cheap commercial electricity supply. But the obstacles, while not insurmountable, may take a decade or more to overcome.

In the meantime, the easiest way for the UK’s small to medium sized businesses to get better priced commercial energy and/or better service is to compare business electricity suppliers. SwitchMyBusiness.com focuses on the UK SME market so can offer a comprehensive, no-obligation comparison of tariffs and switch you to a new electricity supplier. Just complete the form at the top right of this page or call 0330 010 0251.

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