UK energy regulator Ofgem has loosened procurement rules to allow transmission owners National Grid, SSE and ScottishPower accelerate £4bn of investment into the electricity grid.
The so-called advanced procurement mechanism (APM) has been signed off to let the network companies tackle supply chain constraints in procuring essential equipment, materials and services years in advance.
This streamlined process will ensure signed-off projects are ready to break ground as soon as planning approval is granted, allowing TOs to avoid delays, control costs and attract international investment in the drive to clean power by 2030, Ofgem said.
The £4bn “use it or lose it” allowance will be available ahead of and during the next price control period of 2026-31, with the regulator stating 80 transmission projects are required in order to achieve the government’s clean power by 2030 target.
Ofgem director-general for infrastructure Akshay Kaul said: “Building a modern, clean and secure energy system is the key to ending our reliance on international gas markets responsible for volatile prices, so we must do everything we can to clear the way for trailblazing projects to move forward.
“The APM is an innovative model that could be extended in the future to develop other areas of the energy sector and possibly mirrored by other regulatory bodies supporting the delivery of national infrastructure.
“Across the world, many countries are stepping up their investment in clean energy at the same time, putting unprecedented pressure on the supply chain as growing demand for essential materials forces up prices and lengthens delivery times.
“This is why it’s vital that we help the electricity transmission owners move quickly, procuring at scale as early as possible to reduce financial risk – and show the global supply chain that Britain is committed to investing in its energy networks.”
UK Energy Minister Michael Shanks added: “This fast-track measure means we can quickly get Britain building the infrastructure we need to deliver clean power by 2030 and an energy system that can bring down bills for households and businesses for good
“Giving developers a head start in the global race to secure essential materials and equipment will help to avoid delays by putting shovels in the ground as soon as clean power projects secure planning permission and protect billpayers by keeping costs down.”
Ofgem stated that to reduce the risk of stranded procurement assets, only equipment that is transferable between multiple projects will be eligible for the funding.
Nicola Connelly, CEO SP Energy Networks, said: “The £75bn proposed investment in the transmission system is the foundation of the Government’s growth ambitions, unlocking grid capacity for homes and businesses, moving homegrown clean energy around the country and reducing constraint costs for consumers. That’s why the speedy delivery of this national infrastructure upgrade is critical.
“Securing our supply chains early for cables and other equipment is vital if we’re to re-wire Britain at record pace. This is good news for growth, good news for jobs and good news for electricity consumers.
“We will continue to work with Ofgem and government as we accelerate investment in the transmission network.”