Recommendation 42

HM Government · verbatim extract Accepted

96. The Government is committed to accelerating the delivery of new electricity network capacity to accommodate new renewable generation and supporting investment in networks ahead of need, as set out, jointly with Ofgem, in the Electricity Networks Strategic Framework and in the draft Strategy and Policy Statement for energy policy. 97. While grid constraints are a natural part of the electricity system, both Ofgem and the Government recognise the need to keep constraints costs at appropriate levels for current and future consumers. Currently, new network builds are considered when the cost of building new infrastructure is greater than the constraints costs incurred. 98. Through Ofgem’s Accelerating Strategic Transmission Investment work, approximately £20bn worth of network projects have been accelerated to support new renewable generation and avoid increasing constraint costs. The Government has also set out in the British Energy Security Strategy how it will use smart and flexible technologies to increase network capacity. For example, storage solutions could help use excess electricity when generation is higher than demand, and release it when generation is lower but demand remains. The Government is working to allow for such solutions through actions set out in the Smart Systems and Flexibility Plan. Conclusion but response deemed necessary There has been a clear lack of strategic planning and coordination of energy infrastructure and network upgrades. A failure to plan from a whole system perspective risks increasing the overall costs of the transition. We welcome the more strategic approach emerging following National Grid ESO’s Holistic Network Design and Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework. We also welcome measures included in the Energy Bill to enable competition in onshore electricity networks in Great Britain, which should be made a high priority by the Government and Ofgem once enacted. 20 Decarbonisation of the power sector: Government Response 99. Given the scale of additional deployment required to meet Net Zero targets, the network needs to be designed in a more strategic way to be more forward-looking and to support a more integrated energy system. The Holistic Network Design (HND), published by the ESO, represents a step change in the planning of network infrastructure and will for the first time provide an upfront plan for both wider network reinforcements and the connections for offshore wind. The HND Follow Up Exercise is being undertaken by the ESO. In time, the ESO will build on the approach taken for the HND to deliver Centralised Strategic Network Planning (CSNP), which will take a whole system approach to designing the transmission network. Once established, the Government expects that the Future System Operator will take on responsibility for the CSNP.