BEIS and Ofgem are seeking the views of energy industry players, including new entrants, and consumer groups on questions around how our energy system could be more smart and flexible. The Government and Ofgem are committed to ensuring the energy system works for people and businesses. A smarter and more flexible system will provide significant benefits for users and the economy which will ensure the UK has a secure, affordable and clean energy system now and in the future whilst enabling growth in all parts of the country.

A smart energy system uses information technology to intelligently integrate the actions of users connected to it, in order to efficiently deliver secure, sustainable and economic electricity supplies. Smart technologies will be an important source of future flexibility providing the ability to modify generation and/or consumption patterns in reaction to an external market conditions.

For customers, smart energy technology and processes have the potential to deliver lower bills and new services by integrating smart technology and techniques which will allow generation and network assets to be used more efficiently. This has benefits for users as it puts downward pressure on bills. The transition to a smart energy system could feel as radical for customers as the changes experienced when the telecoms industry underwent huge technological advancements.  Whilst this will bring greater complexity it will also deliver far more consumer choice of new products and services which could benefit the individual and the energy system.

The Government and Ofgem are considering a range of options to deliver a smart energy system, including:

  • removing barriers to storage and Demand Side Response (DSR);
  • improving price signals to allow more flexibility;
  • catalysing innovation, so that new solutions can emerge and compete in the market; and
  • assessing changes to roles and responsibilities in the energy system.

Ofgem is currently implementing the Competition and Markets Authority’s remedies for the retail markets, putting pressure on network and system costs, holding the industry to account and promoting security of supply. This consultation seeks views on what future steps should be taken to make the most of innovation and new technologies in designing the future electricity system. There is already a new framework for regulating network companies and incentivising them to respond to their customers’ changing needs.

The system changes described in this call for evidence are happening across the world and Ofgem will continue to engage with others in Europe and elsewhere to learn and benefit from best practices. Ofgem is seeking feedback on specific questions, some of which are outlined below, and any other comments that are considered to be pertinent to the discussions.

  • What are the barriers to large non-domestic customers providing DSR support?
  • How are large non-domestic users currently providing DSR services?
  • Do you think that existing initiatives are the best way to engage large non-domestic customers with DSR?
  • How can more large non-domestic users be encouraged to engage in DSR?
  • What areas should be considered for innovation funding support?

The consultation closes on 12th January 2017. We are formulating our response to the consultation and would welcome your feedback to incorporate into this. To have your say, please email the compliance team at or alternatively complete the contact form. To discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.

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