Power markets regulator Ofgem today publishes its latest five-year strategy for Britain’s electricity system. ‘Protect, Build, Change, Deliver’ are its watchwords for speeding delivery of clean, secure and fairly priced energy for home and commercial consumers.
As UK energy prices begin to fall – on 1 April the new price cap of £1,690 takes effect, down from £2,382 for the same period last year, – Ofgem makes public changes in its approach to ensure consumers are protected as the pace of change accelerates on Britain’s journey to Net Zero by 2050.
The regulator frames its mission under five priorities:
- Shaping a retail market that works for consumers
- Enabling infrastructure for Net Zero at pace
- Establishing an efficient, fair and flexible energy system
- Advancing decarbonisation through low carbon energy & social schemes
- Strengthening the regulator as an organisation
Last week the National Grid Electricity System Operator (ESO) predicted the nation’s electricity demand could grow by over 50% by 2035, as more sectors such as transport and heating use more electricity.
Ofgem’s strategy re-vamp follows appointment in September of its new chair, Mark McAllister, pictured, formerly the head of nuclear regulator the ONR. New directors have also joined contributing expertise in customer service, engineering, economic regulation, digital services and business.
McAllister said price shocks in recent years surpassed anything he had seen in his 45-year energy career.
“As things start to stabilise, now is the time to shift our focus forward to building a cleaner, more secure and affordable energy system that will help to deliver a net zero future for generations to come, while ensuring we are not susceptible to similar shocks again” he said.
Officials recognise Britain’s need for renewables-friendly infrastructure signal network upgrades delivered at a rate unseen for decades. But the task brings opportunities and benefits for customers, McAllister added.
Centrepiece of the agency’s national drive is the agency’s new Accelerated Strategic Transmission Investment (ASTI) framework, designed to weed out redundant network projects, thus axing years off connection waits afflicting renewables & storage sources, including 50GW of extra offshore wind. Two projects, including the 2GW Anglo-Scots EGL1 subsea connector, received provisional approval under ASTI this month.
In November Ofgem unveiled too a network of regional energy planning roles, intended to improve local power planning and speeding up roll-out of new infrastructure.
Ofgem has also put in place new consumer standards requiring energy suppliers to be more proactive in identifying and helping customers at risk of struggling with bills and published a major call for input on debt and affordability to consider how to find a lasting solution to the issue.
It is seeking views on reform of the retail price cap, reflecting the role of dynamic and time-off-use tariffing seen as essential to accommodate a more dynamic power market.
McAllister added: “Our intention is to use our vantage point to bring together all parts of the sector, providing constructive challenge and working in partnership to realise the benefits of the new energy system for the whole of society.”
Ofgem CEO Jonathan Brearley added: “We are now at a pivotal moment as we look ahead to a huge transformation of how we use our energy, how it’s getting to our homes and how it’s created in the first place. This means potentially a huge range of possibilities for consumers – smarter tariffs, more energy efficient homes and ultimately more affordable bills.
“Getting there will not be easy, but it is necessary and we must ensure we bring the public along with us as we make this transition”.
Alongside its strategy to 2029, the regulator also releases its detailed Forward Work Programme (FWP) covering twelve months ahead. From next year the FWP will update the longer-term strategy and the progress it has made towards its objectives, adding metrics to assess progress.
Read the Multiyear Strategy here.
