Source · Select Committees · Environmental Audit Committee
Recommendation 24
24
Deferred
Paragraph: 98
Examine electricity network price controls and modify to incentivise immediate network reform.
Recommendation
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.
Government Response Summary
The government's response focuses on Ofgem's role in regulating NESO and developing the Regional Energy Strategic Plan (RESP), which will feed into future price control processes, but it does not commit to examining the operation of the current ED2 and T2 price control periods or to re-opening or modifying them to incentivize immediate network reform.
Paragraph Reference:
98
Government Response
Deferred
HM Government
Deferred
Ofgem is responsible for setting the regulatory framework for NESO to deliver the Regional Energy Strategic Plan (RESP) and will provide enduring oversight and regulation of NESO’s delivery. Ofgem is currently in the policy design phase of the RESP and on 9 October closed its consultation on the framework for regional governance arrangements. The consultation proposes a Strategic Board in each region, comprising local and devolved government and network company representatives. These boards will facilitate transparency, heighten visibility of regional priorities and provide oversight of the RESP development, thereby providing appraisal of NESO in its role in regional energy system planning and ensuring value is added to regional network development. The RESP is expected to provide inputs to network companies’ business plans, which Ofgem will sign-off as part of the price control process, thereby representing a further appraisal mechanism. Ofgem have not set out plans for additional independent assessment of NESO’s role. Decarbonisation targets