According to a report from the select committee on energy and climate change, a smart grid is necessary for the UK, if it plans to hit its targets successfully on reducing carbon dioxide emissions through energy efficiency.
Experts claim that the market alone cannot be trusted to provide the financing for such an enormous undertaking.
Paddy Tipping, a member of the committee, echoes the same opinion of the experts. He believes that the Government needs to take more control over both the planning and financing of the project.
Tipping said, "Electricity networks are the Cinderella of the industry. Building a smart grid will involve a huge sum of money on top of the £200bn needed to bring new generation on board in a difficult financial climate. We need to set a timetable and start planning long-term contracts and fiscal incentives".
“Our existing regulatory and policy frameworks, along with the grid infrastructure we rely on, were developed to serve the fossil fuel economy of the 20th century. The future looks very different”, he concluded.
The Government has stated its intentions of wanting the UK to be converted entirely to a smart grid. The date for completion, however, has not been set, and is currently offering £6m to help energy companies develop the right technology.