The government has launched its strategy and policy statement for energy policy in Britain, setting out the roles and responsibilities of itself, Ofgem and the forthcoming National Energy System Operator (NESO), as well as key priorities and outcomes.
Under enabling clean energy and net zero infrastructure, the government’s priorities include achieving the UK’s net zero and climate change targets, adopting a strategic, whole system approach to planning and building reliable, resilient, sustainable network infrastructure, enabling anticipatory investment to build network infrastructure at scale and pace ahead of need, and ensuring that the benefits of investment in clean energy and net zero infrastructure are felt across the whole of the UK.
The outcomes it is targeting include network regulation, including the appropriate use of competition, allowing for accelerated delivery ahead of need of electricity network and storage infrastructure, helping to accommodate rapidly expanding and variable renewable generation capacity and demand from low carbon technologies.
It also wants to dramatically reduce timelines for delivering strategic onshore transmission network infrastructure; adopt a strategic, whole system approach to long-term energy planning and a strategic approach to the development of hydrogen transport and storage infrastructure, ahead of need; to have gas networks prepared for a transition to a low carbon future; significant and urgent reform of the electricity connections regime so that new generation and demand projects that are crucial to net zero can connect to electricity networks in a cost-effective and timely manner; and to have sustainable funding models, alongside well-coordinated public and private investment, that enable successful testing and rolling out of innovative solutions.
The next section revolves around ensuring energy security and protecting consumers. Priorities here include having an energy system that is “fair, safe, secure and resilient”; energy wholesale markets that are “competitive, transparent and liquid”; and an energy system that provides protection for both domestic and non-domestic consumers. Intended outcomes include the safety, security and resilience of the gas and electricity systems against the full range of threats and hazards facing the sector, both now and in the future; and improvements being made to the existing investment market mechanisms, including the Capacity Market and Contracts for Difference.
The statement then switches its focus to ensuring the energy system is fit for the future. This section prioritises having electricity market arrangements that meet the objective of a decarbonised and secure electricity system by 2035 at least possible cost to consumers, flexibility being ensure in the energy system at both a national and local level, and an economic and efficient digital infrastructure that enables an inclusive, smart, digital, safe and secure energy system.
Intended outcomes here include having energy market design that supports the government’s ambition to minimise costs to consumers, driving economic growth over the longer term and strengthening the UK’s energy security and independence; competitive, coordinated and effective flexibility markets which are open to all technologies of all sizes; energy code governance that is reformed to support the move to net zero; local governance arrangements that are fit for purpose to deliver effective, consistent and coordinated flexibility markets and regional planning; and the establishment of the National Energy System Operator (NESO) as soon as practicable, before then ensuring it is appropriately resourced with the right capabilities to deliver its existing and future roles.
