Tuesday 9 August 2022

UK readies competition in onshore electricity networks

UK readies competition in onshore electricity networks

UK's onshore electricity network market will soon undergo a major overhaul.

The government has unveiled details of the consultation on the introduction of a framework that would enable competition in onshore electricity networks.

Currently, electricity network companies are responsible for building, owning and operating electricity network infrastructure, ensuring it is ready to meet the energy demand.

Ofgem regulates electricity network companies to do this efficiently and in the best interest of consumers through a process of price controls.

The government plans aim to open up electricity network ownership to third parties - it is believed that more investments in the nation's network infrastructure will be made this way.

Ofgem is expected to publish a consultation that includes a list of projects that it considers should be exempt from the introduction of the onshore network competition and will publish its final decision by the end of 2022.

The factors that will be taken into account in the assessment of the bids in competition will be set out in tender documentation and rules developed by the energy regulator.

Frank Gordon, Head of Policy at the Association for Renewable Energy and Clean Technology (REA) said: "We strongly welcome the principle of greater competition in this area as grid connections have become a key barrier to new power and storage projects due to high costs and lengthy delays.

"Any initiative to reduce these costs and speed up connections is essential to the net zero transition.

"We look forward to Ofgem publishing further detailed proposals on the type of projects to be tendered for and the more detailed processes and timelines.

"We not the deferral of some decisions still outstanding for distribution level connections with more concern, however, as this part of the market is in most need of beneficial change.

"BEIS and Ofgem must prioritise changes at this level and we would welcome further clarity on this quickly."

Written by

Bruna Pinhoni

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