What energy networks want to hear from the Spring Budget

If the UK is to keep pace with the likes of the United States’ Inflation Reduction Act and the European Union’s response to that, then the 2023 Spring Budget is an opportunity for the Chancellor to box clever.

Focussing on regulatory and policy reforms that unlock the private investment we need in our energy infrastructure to reach our ever-closing decarbonisation targets, rather than just on subsidies to attract that investment, is key to doing just that.

That’s the central message of ENA’s 2023 Spring Budget submission, which we’re publishing today.

To deliver those reforms, we need policymakers to think again about the role that our energy network infrastructure plays in the heart of our economy and how that is now changing as we strive to meet our decarbonisation targets.

In the last thirty years or so, Britain’s energy network companies have done a pretty good job at finding new ways of running existing network infrastructure more efficiently, more affordably and with better outcomes. That’s a result of policy decisions based on the idea that that network infrastructure should simply focus on those things, because that’s how they can deliver greatest value to our wider economy.

But times are a changing. The economic role of our energy networks is now changing. And so must those policy decisions.

Our networks now must be able to ensure that Britain’s businesses can access the new smart energy technologies and markets they need allow them to new ways to produce goods more efficiently, to boost our economy’s productivity.

They now need to be able to connect more homegrown sources of energy production, more quickly, to help our economy reap the benefits of reduced exposure to energy price-driven inflation and keep energy costs for our businesses and homes as low as possible.

And they need to do all of this whilst still providing access to affordable, reliable energy supplies in a fair and uniform way, to ensure all our regions reap the benefits of decarbonisation in an equitable way.

So there needs to be a far greater focus on unlocking private investment through policy than has traditionally been the case, so infrastructure can change in tune with the expectations of the economy it serves.

To do that, we’re today proposing six key changes to government and regulatory policy to unlock that investment, through:

• Regulatory reform to unlock strategic investment in network infrastructure to build new capacity, through a Strategic Policy Statement and a net zero mandate for Ofgem
• Supporting the growth of energy flexibility markets to maximise existing energy network infrastructure capacity
• Accelerating investment in hydrogen network infrastructure and blending, by speeding up the development of the business models needed to attract it
• Reforming the land rights and consenting process through the Planning and Electricity Acts, to speed up the building of new network infrastructure
• Confirming future innovation funding for energy network infrastructure through the Network Innovation Allowance, so it can adapt to new technologies as quickly and efficiently as possible
• Developing a strategy for the use of hydrogen for seasonal energy storage, through the Britain Energy Security Strategy, so the right business models can be developed to attract investment in that capacity

If you want to find out more, then you can read our full submission to the 2023 Spring Budget.