Governing for innovation, sustainability and affordability: an institutional framework

The energy system in Britain, like others around the world, is undergoing fundamental and rapid change due to a wide range of different drivers, from technology through to social, environmental and businesses preferences and innovations (Mitchell 2016). The drive to decarbonise electricity over the last 30-40 years has led to a significant rise in renewable generation, especially from wind and solar, and this has had significant impacts on how energy systems are operated and managed. As these technologies continue to expand as their costs come down, the value of flexibility elsewhere in the system will also grow fast. Existing forms of flexibility, such as natural gas-fired power plants, will become increasingly unavailable as carbon budgets get tighter. As a result, flexibility in demand for electricity, either through demand-side response or through forms of storage, is becoming increasingly important