Fife energy trial is UK first

Electric car purchases are on the increase, leading to new and innovative ideas for energy production
Electric car purchases are on the increase, leading to new and innovative ideas for energy production

The UK’s first local energy market is to be trialled in the East Fife area after electricity giant SP Energy Networks was awarded a total of £20m.

The project, called FUSION, is a five-year project involving a range of partners including St Andrews University and Fife Council and comes as energy providers are trying to cope with massive increase in demand caused by things like electric cars and other forms of low-carbon technology.

With the significant cost of upgrading the electricity network ultimately borne by customers, the networks company is developing new technologies and innovations to optimise existing infrastructure instead. This will ensure a smart electricity grid which will be capable of coping with rising demand.

Ofgem, the UK’s national energy regulator, is backing the SP Energy Networks projects with £20.6m funding to demonstrate how both commercial and technical innovation can deliver a flexible electricity system focused on local customers, communities and businesses.

Traditionally, the UK’s electricity network has been largely based on ‘one way’ supply with electricity generated by a small number of large power stations.

But the rise in demand for power for electric vehicles and other low carbon technologies like heat pumps for homes, coupled with an upsurge in customers wanting to connect their own renewable energy sources (including wind and solar power) to the network, has led to a pressing need for the UK to develop a smart grid fit for the 21st Century.

Colin Taylor, Director of Processes and Technology at SP Energy Networks, said: “The increasing take-up of electric vehicles, for example, will cause a considerable load strain on local networks. It is estimated that there will be 9.7 million electric vehicles on British roads and 9.1 million heat pumps in British homes by 2040. We are planning and implementing an appropriate and flexible response to that increasing demand now.”

SP Energy Networks will be trialling a research scheme in the East Fife area called FUSION, which will create the UK’s first intelligent local energy marketplace where energy flexibility can be bought and sold by consumers in an open and competitive market for the first time ever. It is anticipated that this project could enable potential customer savings in excess of £200m by 2050 and reduce carbon emissions by over 3m tonnes.

Jim McOmish, SP Energy Networks Head of Distribution Networks said: “Business and residential customers are seeking to maximise the efficiency and lower the cost of their energy use, and the flexibility of their demand for energy is a marketable commodity.

“At the moment there is no open accessible transparent market to buy and sell this flexibility, and the challenge is building one which unlocks that value for everybody - electricity providers on one side and consumers on the other.”

Ofgem announced this week that LV Engine will receive £7.3m and FUSION will receive £5.3m funding for five year trial projects.