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Alternative model for regulating the electricity networks proposed in ambitious new paper

12/11/2019

A new paper, Energy Networks for the Future, highlights the need for a new partnership between the public and private sector to deliver the energy infrastructure needed to achieve net zero decarbonisation.

The paper, which was launched today (12 November) at the Merseyside Maritime Museum by sustainable energy specialists Regen and supported by us, examines whether the current regulatory model for electricity networks is still fit for purpose to lead the energy transformation and deliver the scale of investment needed to achieve net zero carbon.

A core finding of the paper is that radical reform of the current regulatory model for the energy networks is needed to meet the climate emergency, and to ensure public trust that the industry can deliver a zero carbon energy system that is sustainable, resilient and affordable.

The recommended reforms include:

  • the establishment of a new national office to drive energy strategy and oversee the net zero transition
  • increased devolution of decarbonisation and sustainable energy delivery to regional bodies who would work with industry, city regions and communities to lead a local energy revolution
  • require networks to include in their business plans a range of options that can be quickly enacted to meet changing requirements
  • ensure network companies fulfil their role in achieving a just transition to a low carbon society.

Johnny Gowdy, Director at Regen and co-author of the report, said:

“We know the electricity networks have a critical role to play in our decarbonisation journey, this has been highlighted by the renewed political interest in who owns the networks, how they are governed and the method by which they are regulated and incentivised to make the right investments for our future.

“Ultimately however, the question of ownership may be less important than the ability of the public and private sectors to work together in a new partnership to deliver decarbonisation at least cost, and a whole new set of social and economic priorities, from energy justice and the protection of vulnerable customers, to the creation of jobs, skills and innovation in the new low carbon economy.

“Critically, there is a clear understanding that networks need the public to trust that they are not abusing a monopolistic position, but are acting in the interest of consumers and delivering wider social good.”

The report also identifies reforms to the way in which networks are incentivised to make strategic investments in infrastructure and to support the development of new smarter energy solutions.

Scott Mathieson, Network Planning and Regulation Director, SP Energy Networks, said:

“The pace of change and radical transformation required across the industry means we cannot stand still. Net zero needs to be at the heart of energy policy, and we need more local decision making capabilities to meet the unique needs of every community. In order to build the smarter networks of tomorrow, we need a fair regulatory regime that reflects the investment required, the risk associated, and the incentives necessary to meet net zero.”

You can read the report here - Energy Networks for the Future

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