Electricity networks invite pitches for £300m of green recovery investment

Local authorities, developers and other organisations have been invited to make the case for investment in extra electricity network capacity in their area to support the buildout of shovel-ready energy projects over the next two years.

Up to £300 million of investment will made available under the plans drawn up by Ofgem and electricity distribution networks to bring about a green recovery from the coronavirus pandemic.

The funding will partly come from distribution network operators’ (DNOs) existing allowances for the RIIO ED1 price control period where they have underspent either due to efficiencies or the cancellation of planned work. This money, which would otherwise be returned to consumers through reduced future charges, will also be supplemented with newly raised funds.

The Energy Networks Association will take evidence over the next six weeks, with proposals being judged according to three main criteria:

• Utilisation – how much of the capacity might be used in the near term
• Deliverability – how quickly the upgrades could be completed
• Value for money – the benefits, including to wider society

“With the clock ticking on the UK’s race to hit net zero carbon emissions, we cannot afford to delay in building a clean energy infrastructure that will help power our transport and heat our homes emissions-free,” said Ofgem chief executive Jonathan Brearley.

“We’re urging electricity network companies to come forward with fresh new sites for green investment, starting work quickly, to help kick start the green recovery.”

ENA chief executive David Smith said: “The prime minister has given a very clear direction that the economic recovery from Covid-19 is to be as green as possible – we are incredibly proud to be making that a reality.

“Our energy network operators have already helped turn Britain into a superpower of renewable energy. With this backing from Ofgem and the government, we can ramp-up the network investment to support not only renewables, but battery storage, electric vehicles, heat-pumps and all of the other technologies we will need to achieve our net zero future.”

Energy minister Anne-Marie Trevelyan commented: “The UK’s energy system is one of the most advanced in the world and through the prime minister’s ten-point plan and our energy white paper, we are ensuring that it is also the greenest so we can eliminate our contribution to climate change.

“Unlocking investment in the grid is vital to speed up the development of clean, green technologies that cut emissions and create thousands of jobs as we build back greener.”

The ENA said areas which do not have “shovel-ready” proposals will not miss out and will be able to request investment in additional network capacity as part of DNOs business plans for the RIIO ED2 price control beginning in 2023. It also noted that, whilst the £300 million of potential investment announced today (8 February) is dedicated to electricity distribution, exploratory work is also underway for electricity transmission and gas networks to see what can be delivered through their RIIO2 price controls, which start this April.