Written evidence submitted by Dr Laiz Souto, Senior Research Associate, University of Bristol (WIN0006)

About me

I am an electrical engineer specialized in power systems (Ph.D., M.Sc., Eng.) with international experiences in Europe, North America, and South America. Currently, I am a Senior Research Associate in Future Energy Networks at the University of Bristol with the Department of Electrical and Electronic Engineering. I am mostly working on strengthening power grid resilience to extreme weather events now and in the future, considering large-scale transmission and distribution systems, planning and operational aspects, net zero carbon emissions targets, and sector couplings. I also have a broad interest in low carbon and net zero energy systems. I also actively participate in IEEE Task Forces and CIGRE Working Groups and provide consultations on power grid infrastructure resilience and related topics for utilities and governments. My experience puts me in a good position to contribute for this call for evidence.

My answers:

  1. What role did the UK grid play in the high domestic prices of winter 2022-23?

 

The high dependency on fossil fuel imports, including natural gas from Russia, significantly contributed to the high domestic prices of winter 2022-23. A higher proportion of low carbon energy resources in the UK energy mix could have prevented this situation from happening, as renewable energy generation is cheaper than fossil fuels.

At present, however, the UK grid has limited capacity and flexibility to successfully enable integration of large amounts of renewable energy generation. Moreover, geographical locations with high renewable energy potential are typically far from the heaviest load energy demand (e.g., offshore wind in Scotland, high energy demand in England; high solar irradiance in rural Cornwall, high energy demand in urban centres), and their intermittency requires large-scale energy storage solutions for heavy loads (e.g., industrial clusters). Higher investments in enabling infrastructure for the integration of low carbon energy sources into energy networks could have contributed to overcome these limitations, taking advantage of the regional energy diversity in the UK and Europe. Building enabling infrastructure is crucial to reduce dependency on fossil fuels and achieve net zero carbon emissions targets in the next few years.

 

  1. What more could have been done to prevent price shocks being passed to consumer bills?

 

Profits made by big oil and gas companies should have been capped instead of passed to consumer bills. This approach would have contributed to reduce energy poverty, especially in winter.

Profits made by big oil and gas companies should also have been used to deploy clean energy alternatives with the objective of reducing dependency on fossil fuel imports and carbon emissions. This approach would have contributed to achieve net zero carbon emissions targets.

Consumers should have been incentivised to switch to energy efficient alternatives, including more efficient home appliances, retrofitting, and electrified transport and heat. This approach would have contributed to reduce energy consumption and energy poverty.

Consumers should have also been incentivised to install small-scale distributed generation units to take advantage of local energy production and consumption, hence reducing their energy bills. This approach would have contributed to reduce energy poverty and achieve net zero carbon emissions targets.

 

  1. How should energy companies respond if customers cannot pay their bills and what actions should they not have recourse to?

 

Energy companies should protect vulnerable customers when they cannot pay their bills and never interrupt supply. Their critical loads should be supplied regardless of their ability to pay their bills, as energy is vital even for a basic living standard. To achieve this objective, energy companies could work on the identification and characterisation of critical loads of vulnerable customers to ensure that they are supplied as needed. Although discounts on energy bills could make them affordable for vulnerable customers, their benefits in terms of efficiency and gains of scale for the energy sector are limited.

 

  1. Has Ofgem got its priorities right in addressing customer protection?

 

The discounts on energy bills provided a quick fix for the effects of high energy prices on customers, but in a long-term perspective, they do not seem sustainable. Ofgem needs to support energy companies to respond more effectively in situations in which customers struggle to pay their bills. For more details, see my response to question 3.

 

  1. How effective is the Government's approach towards supporting the sector and delivering a functioning energy market?

 

The UK Government must be bolder in supporting the energy sector and delivering a functional energy market while transitioning to a net zero energy future. For more details on initiatives which could and should be promoted, see my response to questions 1 and 2.

 

August 2023