Source · Select Committees · Business and Trade Committee
Eleventh Report - Decarbonisation of the power sector
Business and Trade Committee
HC 283
Published 28 April 2023
Recommendations
10
Acknowledged
Ensure a stable policy environment to de-risk investments in low-carbon energy infrastructure.
Recommendation
Recent policy and regulatory uncertainty has undermined investor confidence at precisely the time when the UK is looking to attract private investment in clean energy infrastructure. The Government should do its utmost to create and maintain a stable policy environment, …
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Government Response Summary
The government is looking into arrangements to support repowering renewable assets, considering planning frameworks for upgrading onshore wind farms and CfDs for repowering, with consultation responses due shortly or in due course.
Department for Business and Trade
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50
Acknowledged
Para 206
Introduce rigorous annual performance processes for network owners and publicise information for engagement.
Recommendation
We recommend that Ofgem consults on how best to address the asymmetries in resources and knowledge between network companies and other stakeholders, such as consumer groups, which influence processes such as price controls. We recommend that Ofgem introduces a more …
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Government Response Summary
Ofgem acknowledges the importance of addressing asymmetries in resources and knowledge, outlining its sustained engagement process in price controls and future measures in the Energy Bill. However, it does not commit to consulting on the issue or introducing a new rigorous annual performance process for network owners.
Department for Business and Trade
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52
Acknowledged
Para 216
Require National Grid ESO to provide clearer signals on future energy constraint location, value, duration.
Recommendation
Despite welcome progress by National Grid ESO to develop and implement new initiatives to harness flexibility, there is still more to be done to ensure that clear signals are provided regarding the location, duration and value of future constraints. We …
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Government Response Summary
The ESO understands the importance of integrating low carbon technologies and will consider how markets must evolve to facilitate more low-carbon technologies contributing to system balancing and stability, while actively monitoring the carbon intensity of the Balancing Mechanism.
Department for Business and Trade
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55
Acknowledged
Para 220
Accelerate National Grid ESO IT upgrades to handle sub-1MW flexibility and report progress to Parliament.
Recommendation
To unlock the potential role that flexibility can play in better synchronising supply and demand, National Grid ESO will need to improve its digital capabilities. We recommend that National Grid ESO speeds up progress on making sure its IT upgrades …
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Government Response Summary
The ESO acknowledges the need for investment in systems and states it is modernising balancing capabilities through its Open Balancing Program. However, it does not specifically commit to handling assets smaller than 1MW or reporting progress to Parliament.
Department for Business and Trade
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Conclusions (1)
64
Conclusion
Acknowledged
Para 246
The UK investment proposition for the electricity sector has deteriorated since the launch of our inquiry. The global race for capital in low-carbon projects has intensified. Meanwhile developers of renewables projects in the UK are experiencing substantial cost inflation and are subjected to a windfall tax less generous than that …
Government Response Summary
The government states it will not engage in a distortive subsidy race, but expects current capital allowance changes to support green industries and will engage with industry on incentives. It is also considering using Contracts for Difference for operational generators as part of the wider REMA.