British households and businesses will soon be able to buy and sell their own energy directly within a local energy market under ambitious new ‘smart-grid’ plans to be unveiled this week.
Network operators such as SSE Networks, UK Power Networks and Scottish Power Networks believe smart technologies could help create mini regional energy markets across the country, in addition to the national transmission system.
Under the pan-industry plans, power from solar panels on properties or from electric vehicles could be sold back to the network, or even directly to neighbours using block-chain technology.
The Energy Networks Association (ENA) said Wednesday’s plan is the culmination of almost a year of small-scale trials and marks the start of a “rapid increase” in energy mini-markets in the next six years.
It also marks the energy system’s most radical overhaul ever.
Historically National Grid has acted as the system operator across the whole country by using major power plants as a lever to meet varying energy demand levels.
It also uses major energy consumers, such as factories and water plants, to act as a second lever by shifting their energy use to match Britain’s increasingly variable supplies of renewable energy.
But solar panels and smart homes devices - such as internet-connected energy meters and appliances - mean even individual households could play a similar role, and be paid to do so.
David Smith, boss of the ENA, said the overhaul will help networks to meet the challenge of balancing more complicated energy systems, provide a cash boost to customers, and deliver a £17bn benefit to the UK economy in the coming decades.
The economic benefit could rise to as high as £40bn, according to Government estimates.
The plans could help to silence critics of the ENA, who claim the regulated companies are granted overly generous revenue returns from Ofgem.
Energy networks have come under renewed political pressure in recent years due to rising energy bills, of which network costs make up over a quarter.
The recent independent review into energy system costs, undertaken by Professor Dieter Helm, backed the network’s plans to transform into regional system operators but called for them to be taken back into public ownership.
Mr Smith defended the industry saying the privately owned companies “have a great track record of delivering for households, businesses and communities when it comes to network reliability, reducing costs to the bill payer and driving forward new investment in our infrastructure”.