Source · Select Committees · Business and Trade Committee
Recommendation 44
44
Deferred
Paragraph: 189
Establish a Minister-led infrastructure delivery group to expedite national network infrastructure build at pace.
Recommendation
We recommend that Ofgem sees the Accelerated Strategic Transmission Investment (ASTI) framework as a starting point to accelerate the delivery of the necessary grid upgrades required to meet the Government’s 2035 target. This work should continue beyond 2035 to ensure adequate overall capacity for delivering on the 2050 net zero target. We support the recommendation of the Climate Change Committee for the Government to establish a Minister-led infrastructure delivery group, advised by the Electricity Networks Commissioner, to ensure that network infrastructure build is taken forward at pace. This should bring together senior parties across relevant Government Departments, as well as Ofgem, the Scottish and Welsh Governments, National Grid ESO and asset owners, to monitor progress across the initiatives required to expedite progress.
Government Response Summary
The government references its ongoing Review of Electricity Market Arrangements (REMA), which involved a first consultation in 2022 and a second planned for Autumn 2023, exploring options for market reform and locational signals. The response outlines a process of consultation and exploration, but does not directly commit to leveraging ASTI for grid upgrades or establishing a Minister-led infrastructure delivery group.
Paragraph Reference:
189
Government Response
Deferred
HM Government
Deferred
144. The Government published its first consultation on the Review of Electricity Market Arrangements in 2022, and published the summary of responses in March 2023. The Government has outlined options for reform it will explore, which includes reforms to wholesale market arrangements (e.g. shortening settlement periods and ways to introduce more locational signals), mechanisms for ensuring security of supply (including a range of modifications to the existing Capacity Market and potential complementary mechanisms), and mechanisms to support deployment of low-carbon and flexible generation at scale. 145. The Government aims to publish a second REMA consultation in Autumn 2023, and will take decisions on shorter-term reforms more quickly where it is viable to do so throughout the REMA programme. 146. Government’s aim for the second consultation is to set out a direction of travel, next steps and support a smooth transition to any new arrangements over time. The Government aims to significantly narrow the options - identifying lead options where achievable, shifting the debate to focus on a handful of foundational policy areas and their interactions. The Government will engage extensively with stakeholders throughout this period and will assess policy options against five assessment criteria, which have been updated following stakeholder feedback to the initial consultation. These are Deliverability, Investor Confidence, Whole-System Flexibility and Adaptability, as previously set out, and Value for Money (previously “least cost”). 147. The department continues to explore and develop a range of options for sending more efficient locational signals to incentivise generation and demand to locate in more suitable parts of the network and operate more efficiently to lower system costs, and ultimately costs for consumers. These options include but are not limited to locational marginal pricing. The department recognises that some kinds of generation, particularly renewables, can only locate in certain places (e.g. where it is windy or sunny), and it will ensure that the case for investing in these kinds of generation is not unduly affected by any options it takes forward. The role of institutions