Source · Select Committees · Business and Trade Committee
Recommendation 43
43
Deferred
Paragraph: 188
Prioritise enacting competition measures for onshore electricity networks within the Energy Bill.
Conclusion
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.
Government response summary AI-generated
The government will launch a Call for Evidence in summer 2023, followed by a consultation later in 2023, on how the energy retail market framework needs to evolve. This response focuses on retail market reforms rather than strategic planning of energy infrastructure or competition in onshore networks, which was the focus of the recommendation.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
188
Government Response
Deferred
HM Government · verbatim extract
Deferred
154. Subject to the passage of the Energy Bill, the FSO will have the powers needed to discharge their functions effectively. 155. The FSO will manage the electricity system in real time, bring together the planning for the electricity and gas networks into a single institution and build up capability to undertake whole system network planning. There are a number of other potential roles that the FSO could take on over time, for example in relation to local and regional energy planning, data, heat, transport, hydrogen and Carbon Capture Usage and Storage (CCUS). 156. The obligations on the FSO will be set out in licences and regulated by Ofgem, and Ofgem will ensure that other licensees have appropriate obligations themselves to manage their relationship with the FSO. 157. Ofgem will also assess the FSO’s business plans and performance and allocate funding through a price control process. This ensures that the FSO will be appropriately funded to discharge its functions efficiently. 158. The FSO will maintain the UK’s energy security and operate at the cutting edge of net zero with a long-term ambitious vision. The Energy Bill imposes a duty on the FSO to carry out its functions in a way that it considers best calculated to promote the net zero objective. 159. Progress is reliant on several factors, including timings of the including timings of the Energy Bill and delivery by key parties. The aim is for the FSO to be operational in 2024. 160. As part of the FSO’s establishment, the Government will create a framework agreement to outline the primary aspects of FSO’s relationships with government. This will include clear articulation of the roles of Ministers, Ofgem and the FSO, and will be made public. 161. The ESO already makes available public information on the Network Options Assessment and publishes a wide range of documentation on future challenges. The select committee will be able to invite the CEO and Chair of the FSO to attend their sessions.
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