Call for ‘certain Ofgem powers’ to be devolved for EV rollout

Councils should be handed Ofgem’s powers over distribution networks in order to kickstart the local infrastructure for electric vehicles, a new report has recommended.

The study, which has been published today (10 January) by the thinktank Localis, calls for certain powers of Ofgem to be devolved to councils and strategic authorities that are best placed to respond to swift moving changes in demand for power at local levels.

Locally-specific decisions on infrastructure upgrades are better understood and managed at the local level, it says.

While Ofgem should retain national network regulation, the report recommends that oversight of energy distribution systems should be devolved to individual cities.

This devolution would allow authorities to develop their own “smart city” plans based on local needs.

It says: “The current regulatory framework will limit their ability to initiate and respond to this change. The situation therefore calls for more localised regulation.”

The report also recommends the lifting of restrictions that hamper energy network providers from investing ahead of demand, which it identifies as a “key barrier” to a more rapid uptake of EVs.

The report says that charging points and associated grid upgrades should be provided ahead of demand, in order to give private businesses and citizens greater confidence about adopting EVs.

“Given the inevitable rise in electricity usage as a fuel source, not just in cars but also for central heating, and the increasing reliance on constant connectivity as the smart city agenda advances, we argue that this restriction should be lifted,” it says.

The thinktank urges closer co-operation between local government and private network providers on delivering physical energy infrastructure. This should include giving network providers access to public data and vice versa.

Jonathan Werran, chief executive at Localis, said: “Without a change in regulation, behaviour and a wholesale transfer of powers for local energy policies, we risk a tale of two cities in our major urban centres – deepening levels of inequality between the prosperous and more deprived parts of town.

“A ‘devolution revolution’ in locally-regulated energy markets has the potential to accelerate the nation’s switch to clean growth, turn UK cities into powerhouses for sustainable and inclusive prosperity and improve livelihoods in towns and cities across the UK.”

The report, commissioned by Scottish Power, warns that millions of people could miss out on the environmental and financial benefits of electric vehicles.

Smart Cities: Fair investment for sustainable growth calls for rules on investment in infrastructure to be relaxed to ensure the government meets its 2040 target of ending new diesel and petrol vehicle sales.

Keith Anderson, chief executive of Scottish Power, said: “This Localis report makes innovative recommendations to accelerate the rollout of electric vehicles that should be considered further, including investing ahead of demand and devolving some of Ofgem’s powers to cities.

“What is clear is that no-one should be excluded from the benefits that the electrification of transport will bring, which is why energy network companies are so well placed to help, serving customers in both urban and rural areas.

“At Scottish Power we want to play our part to help electrify transport and realise the benefits quicker of cleaner air and lower carbon emissions. We look forward to working with the government and regulators to ensure the investment needed is delivered and that overall costs are minimised so that everybody has access to the health benefits of technologies such as electric vehicles, not just those who can afford it today.”

The report was informed by roundtable events attended by business groups, politicians and local authorities.