Networks back community payments over bill discounts

Offering packages of community benefits to encourage the uptake of grid upgrades, rather than individual bill discounts, will drive greater socio-economic benefits, energy networks have claimed.

Giving evidence to the House of Commons energy security and net zero committee recently, network representatives were grilled on the government’s proposals to offer a mix of bill discounts for individuals and payments for community projects in areas hosting transmission infrastructure improvements.

Ministers accepted Electricity Networks Commissioner Nick Winser’s recommendation that individuals and communities living close to new transmission infrastructure should receive compensation.

Christianna Logan, director of customers and stakeholders at SSEN Transmission, said the company “particularly welcomed” the government’s proposals for community benefits packages, which could be worth £200,000 per substation, for example.

Such packages have the “biggest collective impact across communities” compared with offering direct benefits in terms of money off bills.

She added: “At a community level, they would be more impactful. Money off a bill is a very short-term effect, but, if there are routes for these community benefit funds to provide that longer-term benefit, aligned with net zero, that is definitely something that we would explore.”

Logan also told the committee that the government’s package of benefits could be improved by not offering a flat rate sum for substations but sliding scale payments instead, which recognise how these projects “vary massively in size” from half a hectare to 49ha.

Projects to upgrade existing transmission infrastructure to a larger scale should also qualify for community benefit funding, she said.

Logan was backed up by Phil Jones, chief executive of Northern Power Grid and chair of the Energy Networks Association.

He said: “If there is anything that is going to move the dial, it will be spin-off and socioeconomic benefits.”

Meanwhile Alice Delahunty, National Grid UK electricity transmission president, said more holistic approaches, such as investing in the decarbonisation of buildings, could deliver a wider socioeconomic benefit.

It comes as recently published government research revealed that the majority of Brits would be willing to pay extra to cover the costs of alternative transmission infrastructure such as T-pylons and underground cabling.

Some 58% of the public would be happy to add an additional pound to their monthly energy bills to contribute to the additional cost, with a third (33%) willing to stump up an extra fiver a month.

The research also concludes that electricity bill discounts and direct payments increased acceptability for respondents who were unaccepting of infrastructure projects.

Of those who initially found projects in their local areas unacceptable, 69% were willing to change their mind in exchange for discounts on their energy bills compared to 56% who said they would be more accepting in return for direct payments.

Chancellor Jeremy Hunt announced an initiative in November’s autumn statement which would offer households living within 200 metres of new transmission infrastructure discounts of up to £10,000 on their electricity bills over 10 years.