The early-to-mid 2020s should see Britain’s gas network companies acting with urgency to put the stepping stones in place to help meet the Government’s decarbonisation targets while keeping costs low for the public, according to senior energy industry stakeholders.
Ahead of Ofgem’s response to a major sector-wide consultation on the next regulatory period, the RIIO2 price control, Energy Networks Association (ENA) has released a new independent report on industry priorities for gas network companies, reflecting the views of over 30 expert stakeholders from a workshop held in February 2019.
Widely-respected research company Accent was appointed by ENA to carry out this rigorous and independent work at a critical time for gas network companies. As they advance key innovation projects, the findings underline the significance of recent announcements in creating the right policy and regulatory settings, including the Chancellor’s plans to increase the proportion of green gas on the grid.
Workshop participants included government and regulatory agencies, energy industry representatives, private businesses, consumer groups and academics. Key feedback about the gas network companies from stakeholders included:
- There is a need to act urgently to put the stepping stones in place to meet Britain’s decarbonisation targets; new models for incentivising innovation may be required.
- A broad definition of a ‘whole system’ approach to planning and developing our energy system is needed, which takes account of national and regional geographies and sectors as wide-ranging as transport and water.
- Greater collaboration is needed both between the gas network companies, and also between the gas and electricity network companies, especially on innovation trials and projects.
- A number of risks could impact the gas network companies’ ability to help deliver on decarbonisation including a lack of clear direction on heat policy, time constraints in planning for the forthcoming RIIO2 price control period and cost pressures on networks.
Commenting, ENA Chief Executive David Smith said:
“The message from across Britain’s energy industry is clear: Ofgem’s RIIO2 regulatory framework for gas network companies should enable the investment and innovation needed for decarbonisation.
“Following the Committee on Climate Change’s recent advice that a ‘net zero’ emissions target changes hydrogen from being an option to an integral part of the strategy, the evidence is building that low-carbon gasses play a vital role in a ‘whole systems’ approach to decarbonisation.
“Through ongoing innovation and ENA’s new Gas Decarbonisation Pathways project, Britain’s gas network companies are developing a comprehensive vision and plan which will benefit the public and the environment, with the support of a positive regulatory environment.”
Notes to editor
Energy Networks Association represents the companies responsible for operating the ‘wires and pipes’ of Britain’s energy network infrastructure.
- Serving over 30 million customers, they are responsible for the transmission and distribution network of “wires and pipes” that keep our lights on, our homes warm and our businesses running.
- The current RIIO price control (RIIO1) will end on 31st March 2021, with the new price control (RIIO2) starting on 1st April 2021. Gas network companies are required to submit a RIIO-2 business plan to Ofgem which has been informed by engagement and consultation with stakeholders and customers.
- Research conducted by KPMG in 2016 found that evolving the role of Britain’s gas networks infrastructure so they play a part in meeting our decarbonisation targets could save £214bn by 2050. This research can be found online.
- Independent YouGov polling commissioned by ENA in May 2018 found that 75% of people support the Government doing more to prioritise the production & use of domestic green gas over fossil fuel gas. The polling is attached.
About Energy Networks Association
Energy Networks Association (ENA) is the industry body representing 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 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 40,000 people in Great Britain.