Source · Select Committees · Environmental Audit Committee
Recommendation 11
11
Accepted
Paragraph: 65
Slow rollout of flexible energy technologies delays significant cost savings for consumers.
Conclusion
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.
Government Response Summary
The government outlined plans to ensure strategic investment ahead of need in GB's electricity networks, with Ofgem working to make the RIIO-ET3 price control agile and forward-facing. NESO will also develop Strategic Spatial Energy Plans (2026) and a Centralised Strategic Network Plan (2027) to guide major network investment.
Paragraph Reference:
65
Government Response
Accepted
HM Government
Accepted
As set out above, Ofgem is responsible for setting and reviewing the electricity network price control, however, the Government will continue to work with Ofgem to ensure this works as effectively as possible and is in line with our Clean Energy Superpower mission, including Clean Power by 2030. To enable strategic investment ahead of need in GB’s electricity networks, a supportive and adaptable investment regime is planned, which recognises the benefits of ‘future proofing’ the network and provides strong incentives for timely delivery of clearly defined outputs. Ofgem is working to ensure that the next electricity transmission price control (RIIO-ET3) will be sufficiently agile and forward-facing to remove regulatory approval from the critical path and ensure that funding requirements do not delay strategic transmission projects. RIIO-ET3 will look to build on the progressive principles of the Accelerated Strategic Transmission Investment9 mechanism and incorporate a similar regime into the enduring price control framework. Strategic planning of the major investment needed will be central to ensuring consumer value for money. To support this NESO will develop a Strategic Spatial Energy Plan (SSEP) in 2026 that feeds into a Centralised Strategic Network Plan (CSNP), to be published in 2027, identifying required strategic investment across the GB energy networks. Before this, Ofgem will draw on transitional strategic network plans: NESO’s ‘Beyond 2030: National Blueprint’10 will help set out the need for individual networks projects in the RIIO-ET3 price control. 9 https://www.ofgem.gov.uk/sites/default/files/2022-12/ASTI%20decision%20doc%20-%20 Final_Published.pdf 10 https://www.neso.energy/publications/beyond-2030 Supply chain