Developing a smarter and more flexible power system could save consumers £8 billion by 2030, or £90 per household, according to the Policy Exchange think tank.

Richard Howard, author of the report, said: “Making the power system smarter will also mean it can provide cheaper and cleaner electricity.
“The current set of policies is encouraging a growth in dirty diesel generators – exacerbating air pollution in UK cities and towns.

“The Government needs to level the playing field to encourage the use of cleaner technologies such as demand response and storage.”

Four key points

The report recommended that:

  • the UK Government should clamp down on the development of polluting diesel generators by regulating their emissions and exposing them to carbon taxes;
  • ministers should review the Capacity Market rules to ensure that clean technologies such as storage and demand response are able to access three-year capacity contracts on the same basis as power stations undergoing refurbishment;
  • regulatory changes are needed to remove the “double-charging” of environmental levies on storage, which is undermining their viability;
  • and Distributed Network Operators (DNOs) should be encouraged to consider new approaches to managing their networks such as demand response and storage.

> Download the report