Blog Post

More Green Energy Proposals from Ofgem as it seeks to ‘transform’ local electricity networks

Richard Simmonds • Jul 30, 2020

The proposals from Ofgem are coming thick and fast lately but none so much as those focused on the drive to help the UK reduce its carbon emissions and reach the government’s 2050 NetZero target.

Tackling Climate Change

In the energy regulators latest proposals, it is looking to unlock the investment needed to ensure there will be enough capacity to support the forecasted 11 million electric vehicles (Evs) that are set to be on the nation’s roads by 2030. As well as a sharp rise in the number of Evs, Ofgem is also predicting a sharp rise in the use of heat pumps as conventional gas boilers are phased out. 

To do this it is focusing on the introduction of new technologies such as battery storage and the nation’s electricity distribution networks that transport electricity locally to homes and businesses across the UK.

According to the Ofgem press release the new proposals are seeking to unlock the investment needed to ensure that local electricity networks can handle the extra demands such a drive for more green energy infrastructure will require. 

With millions of new Evs set to be in use over the coming years big questions over how people can charge them from their homes have been raised. Most UK streets have very little parking option available with many people often having to park their cars away from their homes. 

“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,” said Ofgem’s CEO Jonathan Brearley.

Backlash

These latest proposals will do little to ease the ire of many energy network companies as they reaffirm Ofgem’s commitment to keeping costs down for consumers and their expectation of lower returns to investors.

 Ofgem claims the moves will help keep the costs of delivering a greener economy down for consumers but several energy network companies have expressed their concerns over the regulators recent green policies.


 Earlier in July, Ofgem set out its price controls that dictate how much money gas and electricity companies can earn.

Under its latest proposals, which run from 2021 to 2026, companies will be allowed to spend £25 billion on improving gas and electricity networks and recoup this cost from customers.

However, in order to keep costs down for consumers, Ofgem said that the return energy firms will be allowed to make from their investments will be nearly halved.


"This proposal leaves us concerned as to our ability to deliver resilient and reliable networks and jeopardises the delivery of the energy transition and the green recovery," said a National Grid spokesperson.

Further Reading

New rules planned for Energy Suppliers as Ofgem vows to protect small businesses from unscrupulous Energy Brokers


Electric Car ownership must rise 11,000% for the UK to hit Net-zero target


Installation of new gas boilers should be banned from 2025 to hit climate change targets says CBI


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