Source · Select Committees · Business and Trade Committee
Recommendation 33
33
Deferred
Paragraph: 153
Confirm hydrogen storage project deliverability by 2030 and outline the achievement strategy
Recommendation
Whilst the Government’s commitment to delivering hydrogen storage business models by 2025 is welcome, it appears that this could be too late to allow the development of hydrogen storage projects so that they are in operation in time to meet the Government’s target for 10 GW of hydrogen by 2030, given possible lead times of seven to eight years. In response to this report, the Government should confirm whether it still believes that hydrogen storage projects can be delivered by 2030 and, if so, how that will be achieved.
Government Response Summary
The government's response details Ofgem's RIIO-ED2 price control, funding for electricity distribution network upgrades to support electric vehicles and heat pumps, and Ofgem's consultation on future network regulation, completely failing to address the recommendation regarding hydrogen storage delivery by 2030.
Paragraph Reference:
153
Government Response
Deferred
HM Government
Deferred
105. In the current electricity distribution network price control RIIO-ED2, Ofgem has proposed baseline funding of £22.2bn, up by more than £1.3bn from its draft determinations, including £3.1bn proposed for network upgrades, supporting the expected uptake in electric vehicles and heat pumps. Ofgem is allowing baseline expenditure, on average across the distribution network companies, 17% higher than in the first price control period RIIO-ED1. 4 https://www.nationalgrideso.com/industry-information/codes/cusc/modifications/cmp376-inclusion-queue- management-process-within-cusc 5 https://cdn.prgloo.com/media/35e96278bc7040f08ed7103df86c23e4.pdf (action 1) 6 https://www.ofgem.gov.uk/sites/default/files/2023–05/Open%20Letter%20Connections%20%28Final%20 16.5.23%29.pdf (Annex D) 7 https://www.nationalgrideso.com/industry-information/connections/connections-reform 8 https://www.energynetworks.org/newsroom/energy-networks-launch-action-plan-to-accelerate-grid- connections 9 https://www.ofgem.gov.uk/sites/default/files/2023–05/Open%20Letter%20Connections%20%28Final%20 16.5.23%29.pdf (page 9) 10 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1148252/ powering-up-britain-energy-security-plan.pdf (page 50) 22 Decarbonisation of the power sector: Government Response 106. Ofgem has made changes designed to increase the flexibility and speed at which contingent funding can be accessed through uncertainty mechanisms, so that companies can get additional funding above baseline quickly when required. Ofgem is consulting on future systems and network regulation to determine if the RIIO framework is fit for purpose, and to investigate possible archetypes for its reform.