Smart energy could save UK 8 bln pounds a year by 2030, advisers say

LONDON, March 4 (Reuters) - Using energy in a smarter way could save British consumers up to 8 billion pounds ($11.32 billion) a year by 2030 and help combat the country's looming electricity supply crunch, a report by government advisers said on Friday.

Britain's electricity generation and consumer bills are under scrutiny as a plan to close coal-fired power plants by 2025 and weak economic conditions for investment in new gas plants needed to replace them has created concerns about power shortages and price spikes.

However, smart power, based on demand flexibility, increased power connection with Europe and better electricity storage to harness unpredictable output from wind and solar plants could dramatically cut costs and improve security of supply, the report by the National Infrastructure Commission (NIC (NasdaqGS: EGOV - news) ) said.

"The UK can lead the world in harnessing these innovations, bringing jobs and investment into the country and cutting bills for consumers," Lord Adonis, chairman of the commission, said in a statement.

"If we get this right a smart power revolution could save consumers 8 billion pounds a year."

Demand flexibility, often called demand side response - involves deploying automated systems which can reduce consumption during times of peak demand and increase it during low demand.

For instance well-insulated domestic freezers or industrial air conditioning units could be turned off for a few minutes, saving power without inconveniencing customers.

Britain has power connections with France, Belgium and Ireland (Other OTC: IRLD - news) capable of supplying around 7 percent of the country's peak electricity demand but plans to build several more which could mean around 20 percent of the country's electricity supplies is imported by 2022.

Electricity has traditionally been expensive and difficult to store but the report said recent innovations have driven down costs.

"Network owners should be encouraged to see storage as a central tool to improve the capacity and resilience of their networks as part of a more actively managed system," the report said.

The NIC, an independent adviser to the government, was launched last year with the task of investigating Britain's future infrastructure needs.

($1 = 0.7066 pounds) (Reporting By Susanna Twidale; editing by Adrian Croft)