Ofgem has set out its proposals for electricity distribution network price controls in Great Britain from 2023 to 2028, which it said would deliver a greener and fairer energy system for British consumers.
Ofgem said the plans, named RIIO-ED2, included proposals to help companies speedily and reliably upgrade the network in anticipation of forecasted increases in local demand for electricity.
This proposals will also require companies to grow their capacity using ‘flexible’ solutions where they can, such as battery storage or smoothing peaks in demand, rather than building expensive new network capacity.
The move follows proposals earlier this month on the price controls for the gas and electricity transmission and gas distribution operators.
A system wide ‘net zero’ fund – proposed in Ofgem’s recently published draft determinations for the transmission and gas distribution sectors – will unlock significant, potentially unlimited, additional funding to drive good value green infrastructure upgrades.
Companies can access funding over the course of the price control as needed – provided they can make a robust business case. Ofgem said this could fund for instance co-ordinated upgrades to the transmission and distribution power grids to enable a nation-wide charging network for electric vehicles.
There will also be a new strategic innovation fund across all energy networks, worth an initial £450 million, to help drive more research and development into green energy.
The proposals also include increasing coordination and planning across the energy system, digitalisation of the energy system, and making better use of electricity network companies’ data – including sharing this with flexibility providers.
According to Ofgem analysis if owners of electric vehicles use ‘flexible’ charging – where they only top up outside peak demand times on the grid – at least 60% more electric vehicles could be charged up using existing capacity compared with vehicles charged only at peak time.
Ofgem also said that in line with its approach to the wider RIIO-2 price controls it would expect to see lower returns for investors in ED-2 and keep the costs of delivering a green emissions-free economy for Britain as low as possible for consumers.
Ofgem’s chief executive Jonathan Brearley (pictured) said: “Our proposals will help turn Britain’s streets green, putting in place the wires and technology for families to travel in electric vehicles and heat their homes and businesses with clean energy.
“The green energy transformation is not just about putting more copper in the ground. We need a modern, digital grid that uses all our energy assets as efficiently as possible”
“Local electricity networks will be at the forefront of eliminating harmful carbon emissions from the country, helping tackle climate change, so it’s vital they have the investment they need to do this whilst keeping costs as low as possible for consumers.”