Source · Select Committees · Welsh Affairs Committee
Recommendation 30
30
Acknowledged
In order to utilise the opportunities for renewable energy generation in Wales a system of...
Recommendation
In order to utilise the opportunities for renewable energy generation in Wales a system of anticipatory investment in grid infrastructure needs to be created and implemented urgently. In the government response to this report, we request further information on the nature of the changes to Ofgem’s powers and the timeline for this to be implemented. The UK Government should also conduct a review with Ofgem of the impact of the current price control mechanism on the level of anticipatory investment in grid infrastructure across the UK. (Paragraph 143) Strategic planning of the Network
Government Response Summary
The Government is supportive of Ofgem's work to ensure its network price control is more forward-looking and enables strategic investment ahead of need. They regularly engage with Ofgem to understand their work on electricity network price controls and welcome the agile approach to regulation to enable strategic investment at the distribution network level across Great Britain.
Government Response
Acknowledged
HM Government
Acknowledged
The significant opportunities in Wales for renewable energy generation will make a key contribution to the UK Government’s net zero target. The Government is supportive of the work that Ofgem is doing to ensure that its network price control is more forward- looking and enables strategic investment ahead of need, while mitigating risks associated with unnecessary network spend which is underutilised. Our work with Ofgem and with industry to enable more strategic planning in the network will help to support such investment ahead of need, supporting strategic and efficient investment, as outlined in our response to Recommendation 13 above. Government regularly engages with Ofgem to understand their work on the electricity network price controls, which sets allowances and incentives for electricity network companies to build, own and operate electricity network infrastructure. We welcome the agile approach to regulation to enable strategic investment at the distribution network level across Great Britain that Ofgem has taken in its recent Final Determinations for the electricity distribution network price control (RIIO-ED2), as well as the significant upfront investment for strategic investment across the distribution network. Looking ahead to future price controls, Ofgem recently published an Open Letter on gas distribution, gas transmission and electricity transmission network regulation, considering its suitability for purpose in light of all the recent changes in governance