Recommendations and conclusions 53 shown
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The Government has set stretching overall ambitions for the generating capacity required to supply the GB electricity grid with decarbonised energy by 2035. To meet these, current capacity will have to increase by 250% in a little over a decade. Planning for this wholesale electrification of the economy ought to be well under way to ensure that the 2035 deadline is met.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
While we welcome the commissioning of a Centralised Strategic Network Plan and a Strategic Spatial Energy Plan, the relationship between the two is unclear: unless they are developed in tandem, in an environment where the relationship between the two is actively nurtured, there is an evident risk that the two plans will deliver suboptimal outcomes. We are struck by the current lack of evidence of a unified overall approach to delivery planning for the energy system in a way which explicitly facilitates the joint development of interim net zero energy targets, network system planning and requirements for public and private investment in setting out a path to 2035.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government, together with Ofgem and the National Energy System Operator, establish a multidisciplinary planning cell tasked with the development of a detailed pathway to the decarbonised grid. This unit ought to be commissioned to produce a delivery plan that sets out the necessary investment and rollout of electricity infrastructure required to deliver the Government’s current ambitions for low carbon electricity generation. The cell should be established as soon as possible, with a view to producing initial pathways and plans by the end of 2024 at the latest.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Currently the UK relies on mostly imported gas for electricity system balancing needs. Low carbon long-term energy storage has the potential to reduce the UK’s carbon impact whilst maintaining or improving its levels of energy security.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
While short-term energy storage has some market drivers, the development of long-term, inter-seasonal storage at the scale expected to be required faces market, policy and regulatory barriers. The UK economy will require a significant level of low carbon energy storage of this type in order to achieve the Government’s net zero energy goals while maintaining energy security and avoiding energy shortfalls.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The form that this energy storage should take has not been made clear by the Government. It is by no means clear to us that Ministers have grasped the scale of the storage facilities likely to be required, nor the Government action likely to be necessary either in providing long-term storage or establishing the conditions for it to be developed. The sector therefore lacks strategic direction, inhibiting private investment and delaying the future rollout of grid-scale energy storage.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
The Government must address as a matter of urgency the barriers to long term energy storage for the UK to ensure it can provide its citizens with clean and reliable energy during periods of limited renewable generation. This can be delivered through direct Government intervention and investment in infrastructure, as well as through regulatory and policy reforms, such as cap and floor mechanisms or a reformed capacity mechanism, that signal to the market the value of long-term energy storage.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
By the end of 2025 at the latest, the Government must publish an energy storage strategy, underpinned by robust analysis, that indicates to the market the capacity and type of both short-term and long-term energy storage which will be required in a net zero energy system, and the measures that Ministers plan to take to ensure that sufficient capacity is in place to meet the system’s needs in 2035 and in 2050.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The benefits to the energy sector of developing grid flexibility are substantial. These benefits are underpinned and sustained by increased usage of decarbonised consumer technologies such as smart meters, heat pumps and electric vehicles in ways which make best use of the energy supply.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We are nevertheless concerned that recent Government adjustments to the incentives for take-up of these technologies by consumers may affect the capacity of the grid to deliver the benefits of flexibility in the short- to-medium-term: this in turn may affect the willingness of investors to commit to leading and supporting grid development initiatives. It is desirable that, as far as possible, Ministers should publish the rationale behind all decisions on changes to energy transition policies, including the underlying analysis: communication of such decisions should be informed by an assessment of their likely impact on achieving relevant net zero targets.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The flexibility in the GB energy system provided by the development of demand- side response and energy storage capacity can provide significant cost savings to consumers. But the current slow rate of rollout and take-up of flexible technologies which can benefit from demand-side response is delaying the realisation of these benefits. The Government’s 2035 targets of 600,000 heat pump installations a year and 100% of new cars being zero emission both face real challenges.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government support an accelerated rollout of flexible energy technologies to homes and businesses, at a minimum through the enhanced policy support envisaged under the Clean Heat Market Mechanism, by the end of 2025 at the latest. This rollout must be accompanied by clear and effective communication about the financial benefits that these technologies can provide to electricity consumers.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We further recommend that Ofgem expedite its programme to deliver market-wide half-hourly settlement. We expect Ofgem to provide a progress report in response to this recommendation, setting out current barriers to delivery of this objective, identifying measures to overcome them, and indicating a target date for final delivery.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Ofgem and the Energy System Operator have sought to improve grid connection timeframes through reforming grid queue procedures and introducing milestones. Early evidence suggests that the reforms introduced to date appear not to have yet had the immediate and radical effect on reducing grid connection times which they were designed to deliver: two months after the introduction of milestones, the queue had markedly lengthened, a development likely to have been due to a significant increase in applications.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Overall visibility of the grid connections queue is limited, and it is possible that the immediate effect of the reforms introduced has been to lengthen the connections queue as developers react to the new regime. While we welcome the Ofgem project milestone reforms which took effect in November 2023, the measures entailed in the Connections Action Plan may take longer to have a positive effect on the queue.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Delivery of renewable energy projects at pace, and securing their connection to the transmission network, is essential to achieving the generation capacity required under the Government’s strategy for energy security. The connection of generation capacity to the grid is being held up by delays to the ‘critical path’ of grid readiness. Delays in project connections are unlikely to improve the confidence of investors in electrification projects. While the connection reforms brought in by Ofgem and the commencement of implementation of the Connection Action Plan measures are welcome, further work is likely to be required to reduce the time taken to connect generation projects to the transmission grid.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Sustained and consistent action by Government and the regulator will be required to manage the grid connections queue down so that commissioned renewable generation projects are able to deliver outputs to the grid without unreasonable delays.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Department for Energy Security and Net Zero and Ofgem actively monitor the progress of connection reform initiatives and the delivery of the transmission capacity required to facilitate new grid connections, and, where appropriate, streamline the measures already introduced. In particular, we recommend that Ofgem review its milestone queue reforms with a view to advancing projects which are demonstrably ready to connect to the grid to the front of the queue.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that, in the interests of transparency, Ofgem monitor and publicly report on the status of the queue and its progress in managing it on a monthly basis.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The Government and Ofgem must implement in full the changes proposed in the Connections Action Plan. This must entail, for example, the prioritisation of short- term grid requirements, so as to incentivise network operators to prioritise renewable energy connections. The connection of grid inputs from solar and wind, generation, and outputs serving decarbonised applications such as heat pumps and electric vehicle charging, must be prioritised in parallel with connections for larger nuclear and carbon-emitting technologies.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
We recognise the rationale for the current restrictions on the commissioning and construction of connections to regional substations. The GB electricity network must be constructed to certain minimum standards which ensure coherence, reliability and interoperability, under arrangements which provide long-term certainty over responsibility for maintenance. Nevertheless, we consider that there is in principle scope to accelerate grid expansion by authorising experienced third parties to build connections which meet approved standards.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that Ofgem work with the NESO, the Department for Energy Security and Net Zero and the Energy Networks Association to ensure that developers can call on the fullest possible range of providers when seeking to connect their generation facilities to the grid.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
We consider that the current model of Ofgem electricity network regulation, based around lengthy multi-year business plans, risks not being responsive enough to an energy system which is in rapid flux. The present regulatory model locks in market controls over many years: in the current climate, this risks slowing down innovation and restricting network development.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government examine the operation of the current ED2 (distribution) and T2 (transmission) price control periods to establish whether the measures are driving the necessary connections and increases in capacity. If not, these price control periods should be re-opened or modified so as to incentivise immediate network reform. Future network regulatory reviews should be geared to respond as rapidly as possible to the potential for further innovations to decarbonise the economy.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
A general focus by Ofgem on ‘just in time’ network investment means that limited current network capacity can be a barrier to new connections. We recommend that the Government and Ofgem work together to encourage anticipatory investment where it is apparent that new demands on the system are likely. This should be done through clear direction based on the Centralised Strategic Network Plan, as well as through targeted market incentives and reform of the network price control review process.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Energy infrastructure supply chains are often very fragile and are affected by fierce global competition. The shoring up of these supply chains serving the UK’s electrification requirements will require urgent and significant anticipatory investment to ensure that the rollout of infrastructure can take place at reasonable value for money.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that, alongside managing investor confidence through market certainty, the Government work with businesses in the sector to create an electrification supply chain roadmap, setting out how the Government will seek to ensure that the energy sector supply chain is resilient in the short term and is insulated as far as possible against possible future price volatility on international markets. This electrification supply chain roadmap should be published within three months of the State Opening of the next Parliament.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Moving essential elements of the energy infrastructure supply chain into the UK is likely to strengthen the supply chain while creating jobs, improving the UK economy and protecting existing skills.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government work with industry to provide incentives, including financial support, to ensure that essential elements of the electricity infrastructure supply chain are based in the UK, so as to counter competitive incentives from other countries racing to develop their domestic electricity grids. Government policy in this area should prioritise the maintenance and development of the clean UK steel industry as well as driving the UK technology sector.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The UK workforce is currently deficient in many of the skills relevant to several aspects of energy decarbonisation. At present the information available on the scale of the problem is insufficiently detailed to inform good policy making.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
Ministers must communicate clearly to industry their expectations on the rollout of energy and electrification infrastructure to meet Government policy objectives in a timely fashion. In tandem with this, we recommend that the Government conduct a nationwide electrification skills needs assessment across all relevant sectors, so as to inform a comprehensive plan which ought to include robust policies for addressing skills gaps. The Government should also take an active role, through promotion and funding and deployment of development and training programmes, the promotion of electrical education colleges in each region and the delivery of clear career pathways for skilled roles.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
Despite recognising the electrification skills shortage in the UK, the Government has delayed the publication of its green skills plan. We reinforce the recommendation from our 2021 report that the Government sets out how it will measure progress towards its green jobs target, including a definition of ‘green jobs’ and how it will measure the number, type and location of these over the 2020s, for the purpose of monitoring and evaluating the impact of its policies.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Local authorities generally do not have the resources or in-house knowledge to manage the effective determination of the significant number of planning applications required for the rapid growth of clean energy infrastructure.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We urge the Government to ensure that the planning authorities have adequate resources to obtain and develop the skills and capacity necessary to prevent the planning system being a bottleneck to the rollout of energy infrastructure. The increase in planning fees is a justifiable measure to provide more adequate resources to planning authorities: but additional funding should be provided, and finances should be ring- fenced for local authorities.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government develop a plan to ensure that planning authorities, are sufficiently well resourced, in terms of personnel and expertise, to support the timely determination of planning applications for energy infrastructure and facilities. 48 Enabling sustainable electrification of the economy Ministers should expedite the delivery of a training programme designed to provide the necessary skills which will support well-considered and timely consideration of planning applications for electricity infrastructure.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Despite recent reforms to the Nationally Significant Infrastructure Projects regime in respect of energy infrastructure and to the National Planning Policy Framework, we are not convinced that the current design of the planning system is adequate to balance local concerns and interests against the need for rapid rollout of electricity infrastructure.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
The Government should further review the application of planning regulations to electricity infrastructure so as to bring the relevant provisions of the Nationally Significant Infrastructure Projects regime and the National Planning Policy Framework into full alignment. We recommend that the review address the impact of the planning consenting system on the timely deployment of renewable energy generation and energy infrastructure, including the particular conditions which currently apply to applications for onshore wind development. It should further support measures prioritising rooftop solar installations, and mandate the delivery of appropriate solar generation capacity in all suitable new-build properties, both domestic and commercial, subject to suitable connections being available.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Early, well-run community engagement is an essential aspect of successful rollout of energy infrastructure. Communities who are engaged and invested, and who can have input into their local infrastructure, are more likely to accept a greater level of infrastructure and support the energy transition more broadly.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government develop a major public engagement strategy to communicate the need for further electrification of the economy, its likely benefits and the infrastructure development it will entail.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
The Government must also require meaningful developer-led community engagement at the outset of major electricity infrastructure projects. We recommend that Ministers also develop guidance for operators and local authorities on best practice in community engagement.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Engaging early and fully with local communities to explain why renewable energy infrastructure through their area is necessary and of benefit to them is essential to ensure positive public participation and acceptance. Badly-designed community benefits, or those forced upon communities without adequate consultation, can create tension and objection to new infrastructure while adding costs to consumer bills nationwide. Approaches to engagement and consultation which are poorly thought out or ineptly executed will not help to speed up infrastructure development and will be likely to cause more resistance to its deployment overall.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government expedite the implementation of its current proposals for community benefits to be considered as part of community engagement in the delivery of certain transmission projects. A toolkit of illustrative community benefits and potential levels of support should be developed in order to inform communities what options are available to them as well as providing incentives to developers to mitigate visual or community impacts as far as possible. Progress in implementing Enabling sustainable electrification of the economy 49 community benefit measures should be monitored following deployment, and the effectiveness of the overall approach should be reviewed at least every three years.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Community benefits are only likely to become payable after the commissioning into service of infrastructure: so all the uncertainty of the planning process and disruption during construction will be felt before any benefits accrue.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that Ministers assess the merits of providing that a proportion of community benefit be delivered earlier in the process, for instance from the date of grant of planning consent.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The electrification of the economy will lead to a more distributed energy system and will require local government engagement. While some efforts are underway to understand the potential for governance reform between national policy making and local policy making, the optimal governance structure involving national government, regulator, FSO and local authorities is currently unclear.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
The National Energy System Operator (NESO), an organisation currently under development, is consolidating a number of existing functions while also taking on a number of new responsibilities, such as giving advice to the Government and working with local authorities through a new regional energy system planning process. The NESO will be a powerful and influential body: it will be expected to carry out many tasks that in other national energy systems would fall to an energy agency or other independent technical body.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that Ministers establish appropriate arrangements for review of the role and performance of the NESO against the benefits it is expected to deliver to the GB energy system, including good value for money and high performance. It is essential that, from the outset, this significant new body has robust corporate governance arrangements, including a functioning and independent board.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
The incipient role of the NESO in local energy planning ought to be subject to periodic review to ensure that its engagement is appropriate. We recommend that the NESO seek regular independent appraisal of its role in regional energy system planning to ensure that it is adding value to regional network development.
Conclusion · Sixth Report - Enabling sustainable electrification of the economy
Concluded (the committee's words)
Energy security is vital to the UK’s national interest: responsibility within Government for promoting and ensuring energy security ought to be crystal clear. In a rapidly changing governance structure which includes new responsibilities for Ofgem and the new NESO body, it is unclear to us who holds ultimate responsibility for ensuring energy security and resilience while also driving forward progress on decarbonisation.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that Government and Ofgem should maintain clear indicators of progress on decarbonisation and energy security to allow simple public progress tracking of the proportion of renewable electricity on the system compared to expected needs, the security of supply and the progress on connections.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
Renewable energy generation paired with sufficient energy storage will allow the UK to become more self-reliant, secure national energy supplies and provide a buffer against energy price hikes. This is a future that the UK should embrace, and that the Government must support actively.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We recommend that the Government take steps to ensure that decarbonisation, alongside energy security, is at the forefront of all energy discussions. Decarbonisation of the energy system must be established as strategic Government priority, informing clear and unambiguous direction to the industry. The British Energy Security Strategy should be revisited to provide this direction as well as reinforce the intertwined nature of decarbonisation and energy security.
Recommendation · Sixth Report - Enabling sustainable electrification of the economy
Recommended (the committee's words)
We support recommendation 2 of the April 2023 report of the Business, Energy and Industrial Strategy Committee, on Decarbonising the power sector, proposing that the Government define the proviso ‘subject to security of supply’ condition in its 2035 target. Since this term is yet to be defined, we recommend that the Government provide a clear definition in its response to this report