Energy News

What is the Smart Export Guarantee (SEG)?

The UK Government has recently finished taking consultation for the Smart Export Guarantee in March. It was only in November when Claire Perry, the Energy Minister, admitted that it would be unfair for any solar energy exported back to the grid wasn’t remunerated. This was totally against what the government was committed to at the time, which was removing the Feed-In Tariff scheme.

Many believed that when the Feed-In Tariff scheme came to an end, so would the earnings. However, the UK Government is planning to introduce a mandatory supplier-led route to market for small-scale low-carbon generation. Energy suppliers would be liable, under new legislation, to pay solar PV owners for any energy they export back to the grid.

Consultation is now closed, the UK Government is now in the process of completing an impact assessment for the Smart Export Guarantee. They are also in the process of writing the rules and guidelines of the scheme. For example, they were trying to determine if there should be a minimum supplier size threshold for companies which will be mandated to participate.

The UK Government has recently announced that energy suppliers with over 150,000 domestic customers will be mandated to provide a Smart Export Guarantee. Suppliers will have until January 1 2020 to introduce their own versions of the new, smart tariffs that will provide a rate for any exported energy by solar PV systems.

However, a number of energy suppliers have already announced and committed to the rates they’ll pay for exported electricity. Octopus Energy, a 100% renewable energy supplier, has stated they will pay 5.5p/kWh exported. This is actually higher than the existing Export Tariff rate under the Feed-In Tariff scheme.

E.On unveiled their own scheme, which would honour the existing Export Tariff rate, and pay the first 500 customers to sign up for every kWh exported over a period of one year. Bulb announced last month that they would pay 50 customers for any energy exported for a pilot scheme.

The Smart Export Guarantee is actually part of a bigger picture. As we utilise AI and other digital technologies, the way we produce and consume energy will completely change.

A growing number of energy suppliers are now offering their own versions of time-of-use tariffs. These types of tariffs have fluctuating rates which better reflect the wholesale cost of energy. The changing infrastructure of the energy market is helping to create innovative opportunities for consumers.

Octopus Energy’s Agile Tariff actually has a rate which can fluctuate with every half-hourly update of your smart meter. At certain times, you could even be paid for using energy due to demand across the grid being so low.

The actual balancing of energy is a priority for the National Grid too. As the UK Government commits to decarbonising our energy, we will need to utilise battery storage to help make the grid more flexible. By replacing fossil fuel sources with renewable energies, we will need to store amounts of energy for times when the sun isn’t shining or the wind isn’t blowing.

The continued decrease in cost for both solar PV and lithium means the possibility of decentralising the grid. In 2017, over 50% of the UK’s energy came from low-carbon sources but half of this goes to waste by travelling long distances through an outdated grid. All stakeholders can benefit from having individual properties produce their own free renewable energy.

The combination of time-of-use tariffs and battery storage can help shift demand from peak times. This reduces the strain on the actual grid and helps increase individual self-sufficiency. This removes the power from the big six and allows consumers, like households, to take control of their own energy.

Progress is also being made by corporations with new ideas. We have recently partnered with Social Energy to help provide our customers with another opportunity to generate earnings from their solar PV and battery systems.

Social Energy is like any other utility company but sources its energy from domestic solar PV and battery installations. Using AI, all of their customers are a part of a virtual network. This network, through automation, predicts when their batteries have surplus energy. They either sell this to the grid when demand is high or to other batteries that require energy. Batteries have the fastest frequent response of any source, from nuclear plans to wind farms.

On top of the savings available, there are and will be more ways to earn from your solar PV and battery systems. At present, rising energy prices dominate news headlines but in the background, progress is being made through innovation. There is an alternative to achieve self-sufficiency and to earn by making a green investment.

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