We're not costing energy correctly: reward clean energy optimisation, not maximum generation - Energy Post

Laura Sandys at Energy Systems Catapult says policy makers today are too focussed on rewarding clean energy generation, in other words supplying as much energy as possible. With that comes a focus on reducing the cost of the energy generated. But how about reducing demand? Demand optimisation should be equally rewarded: efficiency, non-generation demand management (even at the household level: think EVs and heat pumps), and any assets that minimises whole system costs and emissions.

Sandys describes modelling that has developed new metrics that cost our whole energy system as it gets more complex and interdependent. The guiding principle should be “the cost per additional MW added to the system”. By establishing these metrics, better decisions can be made. The standard LCOE (levelised cost of electricity) used for generation assets is not able to reflect the overall cost and value to the system. The new metrics will enable a new market where optimised demand and optimised supply compete with one another. Sandys ends with [...]

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