‘Beacon’ energy efficiency projects needed to give DNOs alternatives to reinforcement for electric heating, says Sustainability First

Local electricity networks should lead local partnerships to deliver ‘beacon’ energy efficiency schemes over the next five years, according to Sustainability First, to show that they are “workable and replicable” in offsetting the need to reinforce the network  to accommodate more electric heating.

The proposal, which Sustainability First says could use innovation funding targeted at vulnerable customer groups, came in response to a call from Ofgem. The regulator asked stakeholders whether measures in the next five year price review period are enough for local networks to help reduce future demand and therefore future investment. It asked whether  additional measures are needed to ‘spur DNOs to take these actions’.

SustainabilityFirst considered energy efficiency alongside flexibility and concluded that they deliver different outcomes. It said, “Concerted effort is needed from both Ofgem and DNOs to join-up the different incentives to make them work as a whole.” But the local network does not have direct control over flexibility and energy efficiency outcomes and it may need to work with different partners for each.

The group says there are many potential benefits to improving local usage – for example electricity distribution losses are 6-7% of all power transferred over distribution networks. New ED1 licence conditions now “helpfully clarify Ofgem ambition for the DNO role in flexibility procurement and also in promoting energy efficiency and procuring energy efficiency services.”

But energy efficiency in buildings is a new business area for DNOs and “the dots need joining”. SF notes that “GB has a highly complex landscape of responsibilities and measures to improve building energy efficiency (commercial, residential), and many areas are devolved. DNOs must ensure sufficient in-house expertise to understand where and how best to target their own energy efficiency efforts for maximum network impact and to ensure that their actions deliver genuine ‘additionality’ and wider benefit.

In response, it proposes that DNOs should promote a number of major ‘beacon’ energy efficiency schemes to establish the network benefits. These should focus on low-income and vulnerable households.

Read the full submission here

Further reading

Networks’ role in meeting social obligations could grow, says Citizens Advice

Energy efficiency: how the NHS loses out – and what networks could do

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