For a generation, UK electricity network governance has been focused on cost minimisation and worked through gradualist planning. This approach, which is part of a broader regulatory paradigm identified by Michael Moran and others, has produced a reliable system, but appears to be struggling with the imperative of developing a “smart” grid. Smarter electricity networks - comprising the accommodation of intermittent renewable generation through proactive demand side management, integration with a national scale fleet of electric vehicles, smart meters and automated home systems - require systemic change with long term, ultimately uncertain outcomes. The UK regulator has responded to the smart grid imperative by introducing new incentives for some types of innovation in the design of regulation, but its approach, like that of the Department of Energy and Climate Change, remains essentially marginalist. This paper will examine the evolution of smart grid thinking, policy and regulation in the UK, and the dynamics of the relationships between government, regulator, industry and consumer groups. A comparison with changing regulation in telecommunications under condition of rapid technological change will be made. Particular points of tension in the regulatory system for electricity networks will be explored. The paper will assess whether, how and when the current paradigm may shift, given the underlying politics of cost and climate change in UK energy policy.
