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UK Makes Investment in Energy Infrastructure Easier

July 18, 2014 By Karen Henry

UKflag energy-manageThe UK energy sector saw $77 billion of investment between January 2010 and December 2013, with a $14.5 billion investment in renewable technologies in 2013 alone, according to the Department of Energy and Climate Change’s (DECC’s) first report on energy investment in the UK, “Delivering UK Energy Investment 2014.”

This investment tackles a legacy of underinvestment and neglect in Britain’s energy sector, DECC said.

DECC unveiled a pilot program, the Electricity Demand Reduction (EDR) auction, that will remove barriers to energy infrastructure investment. As a part of the pilot, $17 million will be available this year to improve energy efficiency and reduce energy demand. The budget for the full pilot is $34 million.

Businesses will compete for funding for projects that reduce electricity demand, and thereby save businesses money on electricity bills, as well as cut carbon emissions and demand on the national grid. Electrical efficiency could mean savings equivalent to 9 percent of total demand by 2030, reducing the need for new power stations. The government is testing whether projects that deliver lasting electricity savings at peak times, like replacing old light bulbs with LEDs or improving motors and pumps, could compete with generation, demand response and storage in the UK capacity market.

More than 300 organizations, including hospitals, airports and supermarket chains have indicated interest in participating in the program.

The UK government also plans to amend the rules that prevent the same companies investing and exercising rights in generation and transmission networks at the same time. The government will consult on changes to the rules that would give Ofgem the flexibility to decide whether problems would actually arise based on the facts, on a case-by-case basis. This means companies that want to invest right across Britain’s energy will be able to do so without harmful consequences.


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