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 AI-generated
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.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
98
Government Response
Deferred
HM Government · verbatim extract
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.
Read the full response on Parliament ↗