Energy networks ‘may not have their monopolies’ in 20 years, says regulator

Ofgem chief executive Dermot Nolan has said it is possible energy network operation may become open to competition within the next 20 years.

Nolan made his comments at Utility Week Live where he spoke in the Keynote Conference.

During a question and answer session Nolan reminded the audience that part of the vision for the energy system at the time of privatisation was that “regulated natural monopolies” would one day be open to competition.

He said that on this count “we have not made as much progress as I would have liked” and that while suppliers are facing “challenges” in today’s market, “I want there to be real challenges to network companies too. They may not have their monopolies in 20 years time”.

Also participating in this question and answer session was Nick Winser, former executive director of National Grid and now chair of the Energy Systems Catapult.

In response to Nolan’s statements, Winser said that he thought the proposition was “interesting”. He added that, in a future including increased local balancing, low-cost distributed generation and energy storage, it is feasible that there might be “indirect competition which could easily displace some of the services that traditionally come from networks”.

It will be a challenge to “blend together” monopoly regulation with these disruptive technologies, he said.