Energy industry regulator Ofgem has introduced a set of proposals that will make the energy networks of Great Britain more robust and Eco-friendly. 25 billion pounds of funding will be poured into projects that will deliver clean energy for consumers, while an additional £10 billion could potentially be added to push for transformation in the energy sector.
The five-year investment scheme – introduced in July – will provide emissions-free green energy and ensure that legally-binding targets set by the government are met. It will also open up opportunities for employment and green growth.
Ofgem CEO Jonathan Brearley stated that the regulator is working to provide a fairer and greener energy network that will benefit consumers. He said that more of customers’ money would be put into enhancing the existing supply systems, instead of going to company shareholders. This move is expected to ensure that climate change issues are met with an adequate response, and that the economy is empowered to deliver emissions-free energy along with industry-leading reliability.
The £25 billion investment is allocated to upfront expenditure for gas distribution, and transmission networks for electricity and gas. This investment will also further support green energy growth across Great Britain.
Network companies will see their returns being halved, which means that consumers get more value for their money. Additionally, £630 million will be allocated to green innovations, giving way to capacity expansion as needed.
Ofgem has also requested network companies to voice their ideas on investment plans that will match the price control measures currently in place.
Additional funding of £10 billion or more is currently is currently being discussed, and would aim to ensure that companies can access infrastructure upgrades and emissions-free energy over the next five years. The regulator will be carefully reviewing each investment and only giving the go-ahead to measures that are consistent with the government’s decarbonisation goals. Ofgem will also review to ensure that any associated upgrade costs are bearable for customers.
The Strategic Innovation Fund will pour £630 million into Research and Development of green energy projects, including infrastructure development for decarbonisation, heat, and hydrogen.
One part of the the plans shared by Ofgem details how they will tackle local network goals.
Electricity distribution networks will be playing a significant role in eradicating carbon emissions from the sector. Local networks would also be tasked with increasing the flow of electricity, and managing new demand sources to accommodate businesses and households producing clean energy.
Ofgem’s proposals include the provision of EV charging infrastructure, and capacity to support around 11 million electric vehicles on the nation’s roads by 2030. It also eyes the delivery of clean heat to businesses and homes in Great Britain, and helping establish connections to local renewable energy sources.
The system-wide net-zero funding will be beneficial for companies that want to undertake green infrastructure upgrades. It could enable coordinated updates on energy transmission and distribution across power grids to ensure that nationwide charging systems are available for more electric vehicle owners.
Ofgem also introduced proposals that would allow network operators to manage the flow of electricity more effectively, which could increase power generation at the local level. These proposals include increasing capacity through flexible solutions like battery storage, and handling peak demands smoothly – as opposed to creating new network capacity, which typically incurs more expenses in the long run.
Based on Ofgem’s analysis, electric vehicle owners who use flexible charging (charging their batteries outside of peak demand times) could enable around 60% of electric vehicles to share the existing charging capacity.
The regulator’s proposals aim to turn Britain’s streets green, by providing technology and wiring that makes EV charging more convenient. It could also allow businesses and homes to access clean energy for heating.
Brearley stated that green energy transformation involves creating a digital grid that utilises energy assets efficiently. To achieve this, local electricity networks will be expected to work hard to eliminate hazardous carbon emissions.
Tackling climate change takes significant investments in time, effort, and money – and Ofgem has acknowledged this fact by setting up a fund that will benefit not only domestic customers but also businesses, suppliers, network companies, and all energy industry stakeholders.