Source · Select Committees · Business and Trade Committee
Recommendation 48
48
Deferred
Paragraph: 204
Require Ofgem to revise distribution network planning to be more outcome-focused.
Recommendation
We are concerned by the risks that customers face different outcomes in different regions due to a lack of national direction setting for distribution networks. We recommend that Ofgem revises its approach to the planning of distribution networks to one which is more outcome focused. Ofgem should set the minimum expectations that network users should expect, as well as best practice. Distribution Network Operators should then find innovative ways to meet these standards.
Government Response Summary
The government recognises the need for a strategic approach to network planning and notes that Ofgem has launched a consultation on local energy institutions, including proposed Regional System Planners. The government will engage with this review, expects Ofgem to publish a decision later this year, and will then consider proposals to improve coordination and standardise regional approaches.
Paragraph Reference:
204
Government Response
Deferred
HM Government
Deferred
109. As the energy system transitions to net zero, the Government recognises that enabling a more strategic and evidence-based approach to distribution network planning can unlock a wealth of benefits for customers, reduce costs and facilitate a more consistent and better-quality service. This will be essential at a local level to accommodate the expected significant increase in uptake of electric vehicles and heat pumps and growth of local generation of power. 110. This needs to be underpinned by appropriate institutional and governance arrangements at a local as well as national level. Ofgem have recently published a consultation on the future of local energy institutions and governance, including the proposal to create Regional System Planners (RSPs), who would be responsible for undertaking regional energy system planning activities, as well as co-ordinating the input of other actors to the process. 111. The Government welcomes this consultation and will engage with Ofgem over the course of the review to ensure appropriate arrangements are implemented, including legislating if appropriate. It expects Ofgem to publish a decision later this year, and will consider any proposals to improve co-ordination between actors, including distribution network operators, across the energy system at a sub-national level, and to standardise regional approaches to delivering network infrastructure. These will build on measures to incentivise better performance, for example around speed of connections and flexibility set out in Ofgem’s RIIO ED-2 price control, along with Ofgem’s Guaranteed Standards of Performance, which place service level requirements to ensure all Distribution Network Operators meet customers’ needs.