3rd February 2020 Press Release
On his first day in office, Ofgem’s new chief executive Jonathan Brearley has launched Ofgem’s Decarbonisation Action Plan.
Chief executive Jonathan Brearley said:
“Britain has come a long way. It has decarbonised faster than any other major economy, but we must go further, particularly on heat and transport. We are taking an approach that recognises that our role protecting consumers includes achieving net zero.
“As low-carbon renewable energy grows and more transport goes electric, the energy system needs to be more flexible to respond to peaks and troughs in both supply and demand. Our new price controls for network companies will clear the path for this, providing the incentives for investment for the future.
“It is now vital that the energy industry rises to the challenge and demonstrates how it will work with the Government and Ofgem to decarbonise Britain’s energy system at lowest cost.”
The plan sets out nine actions. These will ensure energy networks are ready to deliver net zero, support Government to tackle the difficult question of how to decarbonise heat and transport and encourage innovation to provide new low carbon products and services for consumers. The plan recognises that there are trade-offs to overcome, such as fairly spreading the cost of a low carbon energy system between today’s and tomorrow’s consumers.
Ofgem will look at how it can support the roll out of electric vehicles and will publish an Electric Vehicle Strategy. This will address how the grid needs to evolve to meet increased demand. It will also look at new business models, such as electric vehicle owners selling electricity back to the grid during peak times. This is good news for consumers, who will be able to reduce carbon emissions while saving money on their bills.
To meet net zero, Britain will see changes to the way homes and businesses are heated. This might include using hydrogen boilers or electricity to power heat pumps, and may see more customers connected to heat networks. Ofgem will use its expertise to work closely with government as it develops its strategy to decarbonise heat.
The North Sea Wind Power Hub (NSWPH) has stated publicly that it wants to engage with both the Norwegian and U.K. authorities to pull them into the development of the offshore hub. As well as offshore wind expertise and access to the North Sea, both can also use oil and gas know-how to store hydrogen in offshore reservoirs and retrofit gas pipelines to transport hydrogen instead. A spokesperson for BEIS said: “The government recognizes the benefits of hybrid projects, including joint interconnector and wind projects, which may develop into efficient and cost-effective solutions to help the U.K. decarbonize. We are continuing to engage with stakeholders and developers to understand the potential benefits of these projects.”
Installing an additional 30GW within ten years will require significant changes to a range of policy frameworks, and co-operation between government and industry, writes Christopher Hopson