ENA, which represents GB electricity distribution network operators, has said Ofgem’s draft determinations for the RIIO-ED2 Price Control will need more work to deliver the investment needed for Net Zero.
David Smith, Chief Executive of Energy Networks Association (ENA) said:
“The final determinations will need more work to give us confidence that RIIO-ED2 will be compatible with customers’ expectations of an energy system that enables the transition to Net Zero. We will work with Ofgem over the coming months to meet this challenge.
“As record numbers of electric vehicles, renewable energy and heat pumps are introduced to our energy system, the ED2 Price Control period is crucial, recognising the scale of transformation and the leading role networks will play in enabling decarbonisation.
“As well as supporting increasing numbers of low-carbon technology through flexibility and innovation, networks need both sufficient certainty and agility around investment to meet the scale of the challenge at the time customers and communities need them.”
Notes to editor
The electricity distribution networks propose addressing the challenge of delivering safe, sustainable and reliable supplies of energy to communities while costing less than 30p per day per customer across the five-year price control period.
As well as supporting the government’s Net Zero ambitions, the energy networks are ideally placed to support long-term economic growth locally and nationally through job creation and the use of local supply chains.
The industry already employs 36,000 people across Great Britain and that workforce will have to increase significantly over the coming years in order to deliver Net Zero by 2045 in Scotland and 2050 in the rest of the United Kingdom.
Central to the plans outlined by the electricity distribution network operators in their initial submissions to Ofgem is the ability to make strategic investments, delivering infrastructure ahead of need. With some equipment in situ for decades at a time it is essential that we start creating our future energy system now to avoid the potentially costly disruption of retrofitting network assets later.
Network costs, including electricity and gas distribution and transmission, have remained largely flat since 2015 and, relative to the increasing wholesale price, have fallen as a percentage of the overall bill when the cost of the supply market failure is removed. This has been achieved whilst delivering high levels of customer service in day-to-day operations and supporting 36,000 jobs across Great Britain.
The UK’s energy networks are already recognised as being some of the most innovative in the world, driven by a supportive regulatory environment. This has enabled Great Britain to have the biggest local flexibility markets in the world, reducing costs for customers and providing new routes to market for low-carbon technologies.
What networks proposed in their Business Plans:
- Support the energy transition, including the shift to electric vehicles and accommodating greater numbers of heat pumps and renewables.
- Support customers, particularly those in vulnerable situations, through measures such as the Priority Services Register.
- Enable the sector to continue to be a global pioneer for innovation over the next five years, digitalising systems and processes and using grid capacity in smarter ways to reduce the need to build new infrastructure in some areas.
- Deliver enhanced resilience and reliability to communities following the Storm Arwen review published by Ofgem and support the government’s ambitions for a secure energy future.
About Energy Networks Association
Energy Networks Association (ENA) is the industry body representing the companies which operate the electricity wires, gas pipes and energy system in the UK and Ireland.
ENA helps its members meet the challenge of delivering electricity and gas to communities across the UK and Ireland safely, sustainably and reliably.
Its members include every major electricity and gas network operator in the UK and Ireland, independent operators, National Grid ESO which operates the electricity system in Great Britain and National Grid Gas which operates the gas system in Great Britain. Its affiliate membership also includes companies with an interest in energy, including Heathrow Airport and Network Rail.
What are energy network operators?
Energy network operators manage and maintain the wires, pipes and other infrastructure which delivers electricity and gas to your home, business and community. They are private companies which are regulated by Ofgem and employ around 45,000 people in the UK and Ireland. They are represented by their industry body, Energy Networks Association (that's us).