The energy industry will have to move towards a fixed-based charge for power connection in the UK.
That’s the view of Paul Massara, CEO of Electron, who believes as the UK moves towards a low carbon economy, decentralised energy generation will increase, with households and businesses producing their own power and storing them.
He told ELN: “When you have more and more people having embedded generation, it will mean that less kilowatts flow through the transmission and distribution network. The transmission and distribution network is still going to have to be funded and therefore we’re going to have to move to a more fixed-based connection charge.
“Think of your BT line, everybody pays their £19 a month – we’re going to have to move that way.”
However, Mr Massara believes the question of whether that is fair for low users will have to be addressed.
He added: “As Ofgem look at RIIO-2 and they look at the charging base, it’s likely we’re going to move to a connection charge as a higher position and then how does that affect the fuel poor and people who have low bills? How does it affect it if it’s the people who are rich have electric vehicles or can put solar and battery in their homes? But people who don’t then end up getting differential pricing because they’re not storing their energy at that time.”
He suggested both BEIS and Ofgem need to look at this energy transition and think about who are the “winners and losers in the system”.
Electron has developed a flexible trading platform based on blockchain technology that helps to integrate assets such as renewables and electric vehicles on the system and balance the grid.
Mr Massara said out of the £1 billion National Grid currently spends, £800 million could go through a traded market, with many more buyers and sellers involved in the flexibility market.
You can watch the full interview here.