Source · Select Committees · Welsh Affairs Committee
Recommendation 22
22
Accepted
Paragraph: 110
The Government should outline the circumstances in which higher grid construction costs, for example due...
Recommendation
The Government should outline the circumstances in which higher grid construction costs, for example due to undergrounding, are justified to enable rural communities to keep pace with the decarbonisation transition.
Government Response Summary
Ofgem is revising how customers are charged for connecting to distribution networks to reduce connection costs, and project approval is a matter for Ofgem.
Paragraph Reference:
110
Government Response
Accepted
HM Government
Accepted
The Government recognises that grid connection costs can be high in rural areas due, for example to distance from the existing network. Ofgem are revising how customers are charged for connecting to the distribution networks, meaning that they will no longer have to contribute to (in the case of demand connections), or will contribute less to (in the case of generation connections), network reinforcement costs to accommodate their projects. This should mean reduced connection costs for projects in rural areas where the existing network may have less available capacity. With regards to grid reinforcement more generally so that all consumers, including those in rural areas, can be connected to and use the electricity grid, approval for any project is a matter for the independent regulator, Ofgem. The Government supports Ofgem in its work to strike the balance between enabling sufficient capacity on the network and doing so at a level that is economically prudent, to avoid the risk of assets which are not used to