Source · Select Committees · Business and Trade Committee
Recommendation 41
41
Accepted
Paragraph: 186
Inadequate grid network capacity and connection delays are hampering low-carbon power delivery.
Conclusion
A lack of network capacity and delays to securing grid connections are together hampering the delivery of low-carbon power and driving potential investments overseas. For too long, transmission and distribution network owners have been able to delay or avoid the level of anticipatory investment required to deliver a network capable of meeting the needs of the country. Ofgem’s approach to agreeing future investment in previous investment rounds has not been proactive enough, Decarbonisation of the power sector 107 and frequent changes to Government policy have increased investment risk. Together, the system has failed to deliver what is required, and that must change.
Government response summary AI-generated
The Electricity System Operator (ESO) acknowledges the need for investment in its systems and details its ongoing Open Balancing Program to modernise balancing capabilities and IT platforms, aiming to increase flexibility and market participation for a net-zero electricity system. This describes internal ESO work rather than directly addressing systemic network capacity issues or Ofgem's investment approach.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
186
Government Response
Accepted
HM Government · verbatim extract
Accepted
93. Both Ofgem and the Government recognise that a transformation of the electricity networks is needed, at significant scale and pace, to support power sector decarbonisation and accommodate the shift to renewable generation at the same time as increasing demand through electrification of transport, heat and other sectors. 94. The Government is committed to accelerating the build of new network infrastructure and speeding up grid connections. Nick Winser, the Network Commissioner will advise Decarbonisation of the power sector: Government Response 19 in June on how to accelerate transmission infrastructure and alongside Ofgem, the Government will publish a connections action plan in the summer. The Government supports Ofgem’s work to enable anticipatory investment in the network, for example enabling nearly £20bn of investment in the transmission network through their Accelerating Strategic Transmission Investment Framework. Ofgem is also enabling more strategic investment at distribution network level, and has included £3.1bn for lower voltage networks to be upgraded to enable low-carbon technologies to join the grid. 95. Ofgem published a consultation into future systems and network regulation (FSNR) in March 2023, where it set out options to update network regulation in order to support 2050 energy transition goals. The Government supports Ofgem’s work in the FSNR to develop a price control framework that has sufficient anticipatory investment to drive the energy transition while protecting consumers from unnecessary costs.
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