Source · Select Committees · Environmental Audit Committee
Sixth Report - Enabling sustainable electrification of the economy
Environmental Audit Committee
HC 278
Published 24 May 2024
Recommendations
7
Deferred
Para 46
Address urgent barriers to long-term energy storage through government investment and policy reforms.
Recommendation
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 …
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Government Response Summary
The government's response focuses on Ofgem's work with the ENA to make connections queue data publicly available monthly, which does not directly address the broader policy and investment barriers to long-term energy storage or the suggested regulatory reforms.
8
Deferred
Para 47
Publish comprehensive energy storage strategy by 2025, detailing required capacity for net zero.
Recommendation
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 …
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Government Response Summary
The government did not commit to publishing an energy storage strategy by 2025; instead, it outlined ongoing work by Ofgem and NESO on connections reform to accelerate connections for renewable generation and storage projects.
10
Deferred
Para 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 …
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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.
13
Deferred
Expedite Ofgem's programme to deliver market-wide half-hourly settlement and report progress.
Recommendation
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, …
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Government Response Summary
The government's response does not address the recommendation for Ofgem to expedite market-wide half-hourly settlement or provide a progress report. Instead, it discusses financial support and incentives for electricity network manufacturing supply chains, promising an update on wider incentives shortly.
18
Deferred
Para 91
Actively monitor grid connection reforms and advance demonstrably ready projects to the front of the queue.
Recommendation
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 …
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Government Response Summary
The government's response focuses on accelerating infrastructure delivery through a new Bill and promoting renewable energy via changes to the National Planning Policy Framework, but does not specifically address monitoring existing connection reform initiatives or Ofgem reviewing its milestone queue reforms to advance ready projects.
24
Deferred
Para 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 …
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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.
27
Deferred
Create and publish an electrification supply chain roadmap to ensure energy sector resilience within three months.
Recommendation
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 …
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Government Response Summary
The government states it will be reviewing the need for an electrification roadmap, rather than committing to create and publish one, and plans to set out its full approach to supporting UK supply chains in a forthcoming Industrial Strategy.
29
Deferred
Para 108
Provide financial incentives to establish essential electricity infrastructure supply chain elements in the UK.
Recommendation
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 …
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Government Response Summary
The government states that clean energy industries are a priority growth sector and that it will set out its full approach to supporting UK supply chains in the forthcoming Industrial Strategy, without committing to immediate financial incentives for basing essential supply chain elements in the UK.
42
Deferred
Para 145
Expedite implementation of community benefit proposals, develop toolkit, and regularly review effectiveness
Recommendation
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 …
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Government Response Summary
The government is currently reviewing how to effectively deliver community benefits for electricity transmission network infrastructure, considering a combination of direct benefits and community funds, with further details to be set out shortly. It also mentions NESO developing Electricity Transmission Design Principles.
53
Deferred
Provide a clear definition of 'subject to security of supply' condition in 2035 target
Recommendation
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 …
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Government Response Summary
The government defers providing a clear definition for "subject to security of supply", stating it expects to set out more detail on its approach to delivering Clean Power by 2030, including how security of supply will be ensured, by the end of the year.
Conclusions (7)
14
Conclusion
Deferred
Para 87
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 …
Government Response Summary
The government's response focuses on the creation of the Office for Clean Energy Jobs to address workforce skills and training in the energy sector, rather than directly addressing the committee's observation that grid connection reforms have not yet reduced connection times.
15
Conclusion
Deferred
Para 88
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 …
Government Response Summary
The government's response discusses the definition of green jobs and the role of the Office for Clean Energy Jobs in developing skills and monitoring the clean energy workforce, without addressing the committee's observations on grid connections queue visibility or the impact of recent reforms.
16
Conclusion
Deferred
Para 89
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 …
Government Response Summary
The government's response addresses proposals to increase planning fees and support for local planning authorities, funded by the stamp duty surcharge, rather than directly detailing further work to reduce grid connection delays for renewable energy projects.
17
Conclusion
Deferred
Para 90
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.
Government Response Summary
The government response focuses on initiatives to improve planning capacity for Nationally Significant Infrastructure Projects through the Planning Advisory Service, recruitment funding, and cost-recovery, rather than directly addressing how it will manage down the existing grid connections queue for commissioned renewable generation projects.
20
Conclusion
Deferred
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 …
Government Response Summary
The government's response outlines a planned national public awareness campaign for early 2025 to promote the importance of new electricity network infrastructure, which does not address the recommendation to implement the Connections Action Plan in full or prioritise renewable energy connections.
21
Conclusion
Deferred
Para 94
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 …
Government Response Summary
The government's response focuses on reviewing mechanisms for delivering community benefits and mitigating visual and community impacts from new electricity transmission infrastructure, rather than directly addressing the committee's suggestion of authorising experienced third parties to build connections to accelerate grid expansion.
26
Conclusion
Deferred
Para 105
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.
Government Response Summary
The government acknowledges challenges in supply chain resilience and states it will review the need for an electrification roadmap and set out its full approach in a forthcoming Industrial Strategy. It also highlights existing initiatives and Ofgem's plan to introduce an advance procurement mechanism from early 2025.