How the Spring Budget can unlock the strategic investment needed for tomorrow's energy grid.

In our submission to the 2023 Spring Budget, we proposed changes to current government and regulatory policy in six key areas.?

These changes are necessary to help unlock investment through energy network companies, which is required to ensure Britain’s energy network infrastructure continues to support our country’s economic needs as it decarbonises.?

In our?submission, we set out the economic benefits that Britain’s energy network infrastructure can deliver in?terms of supporting productivity growth, reducing inflationary pressures and addressing regional economic imbalances.?

To do that, we propose the following changes:?

Regulatory reform to unlock strategic investment in energy network infrastructure, by:?

• Updating Ofgem’s remit to incorporate the government’s net zero targets as set out in the 2008 Climate Change Act. This is important so that long term net zero goals are recognised and planned for?now.?
• Issuing guidance to Ofgem to unlock strategic energy network infrastructure investment, in the form of a Strategy & Policy Statement.

Accelerating investment in hydrogen network infrastructure, by:??

• Accelerating the development of a regulated asset base business model for hydrogen network infrastructure, with an interim measure introduced until that business model is finalised.?
• Developing a business model to support the blending of hydrogen into gas networks by hydrogen producers.?

Reforming the land rights & consenting process for energy network infrastructure, by:?

• Reforming the Planning and Electricity Acts to permit timely and cost-effective installation and maintenance of electricity infrastructure.?

Growing new smart energy markets to maximise energy network infrastructure capacity, by:?

• Introducing new financial support, allowances, incentives or business models to reduce the upfront costs of smart ‘behind the meter’ low-carbon technologies for households and businesses.?
• Mandating that new low-carbon technologies in homes & businesses installed are ‘smart’ to ensure they can take part in flexibility markets.?
• Introducing a licence requirement on energy suppliers to offer flexibility services to households.?

Confirming future innovation funding for energy network infrastructure, by:??

• Confirming the extension of the Network Innovation Allowance beyond 2026 or confirm the government’s?intention to develop a successor allowance of a similar nature.??

Developing a policy strategy for seasonal energy storage, by:?

• Updating the British Energy Security Strategy to include a commitment to deliver an energy storage strategy by the end of 2023, which defines what business models will be developed to secure investment in seasonal energy storage.?