Source · Select Committees · Environmental Audit Committee
Recommendation 10
10
Deferred
Paragraph: 64
Publish rationale and analysis for energy transition policy changes, assessing net zero impact.
Recommendation
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.
Government Response Summary
The government deflected the recommendation to publish rationales and impact assessments for policy changes by detailing Ofgem's role in setting electricity network price controls and implementing agile investment mechanisms to support strategic grid investment.
Paragraph Reference:
64
Government Response
Deferred
HM Government
Deferred
Ofgem, as the independent energy regulator, is responsible for setting and reviewing electricity network price controls. The Government is working with Ofgem to ensure the price controls support our objectives. Ofgem recognises the need to ensure that decision-making processes to agree new investment projects are as agile as possible and has worked with industry to achieve this objective. Strategic investment is being enabled by allowing for investment ahead of need, considering energy forecasts beyond 2028. The ED2 and ET2 price controls include agile uncertainty mechanisms, enabling networks to anticipate and respond to changing requirements during a price control period. Re-openers are a type of RIIO uncertainty mechanism, which will enable network companies to request additional funding during the price control period if certain conditions are met.