Call for Evidence

Enabling sustainable electrification of the UK economy

The Environmental Audit Committee (EAC) is to launch a new inquiry examining the challenges and opportunities arising from the increasing use of electricity to power the economy of Net Zero Britain.

Background

Upgrading Great Britain’s electricity grid—which consists of the transmission network and distribution network—is crucial to achieving net zero. The National Grid was originally designed to deliver electricity from a small number of large generating plants on land. The increasing number and changing nature of electricity generators, including more solar and offshore wind installations, is straining current systems and posing new challenges for balancing supply and demand. Demand for electricity is also expected to increase significantly in the coming decade, as other sectors, such as transport and domestic and commercial heating, switch to electricity to reduce emissions.

The Government has set stretching ambitions for the roll out of low-carbon electricity generation technologies—such as solar and offshore wind—to help the UK achieve its target to completely decarbonise the electricity system by 2035. But in the course of its recent inquiries into Accelerating the transition from fossil fuels and securing energy supplies, Technological innovations and climate change: onshore solar power and Technological innovations and climate change: Community energy, the Committee has identified difficulties in securing grid connections as a key barrier to rolling out renewables rapidly—with delays of up to ten years to secure the licences and permissions required to build an offshore wind farm. A lack of physical infrastructure, poor availability of data on solar photovoltaic generation across the system, and a ‘queuing system’ of applications are among the factors which are demonstrably slowing progress towards the sustainable electrification of the economy. In its recent report on Decarbonisation of the power sector the Business, Energy and Industrial Strategy Committee came to similar conclusions, calling on the Government to play a more active role in co-ordinating and pushing through the required upgrades to transmission and distribution networks and speeding up the process for planning consents and grid connections.

The move to a smarter, more flexible, digitally-enabled grid also holds exciting potential. Digitisation of the electricity system provides an opportunity for dynamic demand management to play a greater role in balancing the system. Greater roll-out of smart digital technology—such as smart meters, internet enabled appliances, and electric vehicles—could allow the system operator to smooth out peaks in demand and enable electricity consumers to make the most of lower unit prices at certain times of the day and night. 

Policy context

The roll out of digital and low-carbon technologies, the development of distributed generation and the electrification of the energy system will all require major changes to the way the electricity grid in Great Britain is managed.

The Energy Bill, introduced in the House of Lords on 6 July 2022 and introduced in the House of Commons on 25 April 2023, will establish a Future System Operator (FSO), an independent body which will oversee the entire energy system. This will give the National Grid Electricity System Operator (ESO) a new role as the FSO.

In 2022 the Government initiated its Review of Electricity Market Arrangements (REMA). Its first consultation on the review, undertaken between July and October 2022, sought views on the reforms needed to transition to a decarbonised, cost-effective and secure electricity system. A summary of responses to the consultation has been published: the Government intends to publish a refined set of options for reform and to consult again in 2023. 

In the British Energy Security Strategy of April 2022 the Government also said that it was aiming to speed up consent times and ‘smarten up’ the electricity system. As part of the Powering Up Britain plan launched in March 2023 the Government pledged to publish a connections action plan in the summer of 2023: this is expected to articulate actions by the Government, Ofgem and network companies to accelerate network connections for renewable energy and other projects.  The Electricity Networks Commissioner, Nick Winser CBE, appointed in July 2022 to an office created under the British Energy Security Strategy, is due to publish recommendations this summer.

In March 2023 the Government launched a further consultation on revisions to the National Policy Statements on energy infrastructure, including on electricity networks infrastructure, seeking to clarify the critical national priorities for infrastructure planning, and including more detail on the strategic planning of electricity networks.

Call for Evidence

The Committee welcomes written submissions which address any or all of the issues raised in the following terms of reference, to be received by 5pm on Thursday 1 June 2023:

The National Grid and the Government’s energy targets

• What challenges does connecting more renewable electricity to the grid pose, both for those businesses and households who wish to connect to it, and for grid operators?

• To what extent do the following act as barriers to the UK’s targets to decarbonise the power supply? How well is the Government addressing these barriers, and what else can be done to address them? What, if any, targets should be set in these areas?
  1. grid connection delays and bottlenecks, onshore and offshore;
  2. lack of, or delays to developing, necessary infrastructure;
  3. insufficient scale or capacity;
  4. supply chain and skills constraints, and
  5. access to finance

• How resilient is the National Grid? How does it need to adapt to achieve the Government’s targets of (a) decarbonising the UK power system by 2035 and (b) becoming a net zero economy by 2050? What changes are needed to promote resilience through diversity of supply?

• What contribution do, or should, localised mini-grids make to achieving the Government’s targets of (a) decarbonising the UK power system by 2035 and (b) becoming a net zero economy by 2050? What role ought there to be for decentralised energy distribution points and distributed energy generation in the future of electricity supply?

• What role will, or should, artificial intelligence play in decarbonising UK’s power supply?

• To what extent will the measures in the British Energy Security Strategy and the Powering Up Britain plan deliver the Government’s high-level targets of (i) decarbonising the UK power system by 2035 and (ii) becoming a net zero economy by 2050?

• How will the design of the future grid incorporate adaptation measures so as to minimise the potential impacts on the electricity system from extreme weather events, such as Storm Arwen in November 2021?

Storage and flexibility

• What developments, including technological developments, and incentives are required in the areas of:
  1. storage;
  2. transmission and distribution;
  3. demand management and flexibility, and
  4. interconnection with neighbouring grids?

• How will the expected growth of demand for electricity to power low-carbon technologies such as electric vehicles and heat pumps affect how supply and demand is balanced across the electricity system?

Governance and institutional arrangements

• Are the current governance arrangements for the grid fit for purpose? To what extent do the proposals in the Energy Bill address any issues in governance?

• Does the current Electricity System Operator—or will the proposed Future System Operator—have sufficient powers? If not, what further powers will they need?

• Is there enough resource available—across the Electricity System Operator, regulatory bodies, Government, and network companies—to deliver policy, regulatory and industry workstreams at the pace necessary to achieve Government targets? If not, what additional resource is required?

• Is Ofgem fit for purpose as a regulator to deliver the increase in electricity supply and grid connection needed? Should Ofgem have a net zero remit?

• Could the introduction of competition in parts of the network be used to reduce the cost to consumers in delivering a net-zero power system?

• Is the five-year business plan cycle appropriate to achieve the overarching objectives of delivering a net zero grid by 2035 and a net zero economy by 2050? How does the pricing review process need to evolve to achieve the UK’s strategic objectives on decarbonisation?

Planning, local government and communities

• What barriers are there in the planning process? Do the proposed changes to the National Policy Statements on energy infrastructure address these adequately? Can the grid development required be undertaken wholly under the nationally significant infrastructure project planning arrangements in the Planning Act 2008?

• Is land availability a constraint?  If so, how can the constraint best be addressed?

• How can communities be encouraged to accept the infrastructure required to increase capacity? What compensation, if any, might be required?

• What potential is there for community energy schemes to contribute to sustainable electrification? How can they be encouraged to develop?

• What role are local authorities playing in delivering the Government’s targets to decarbonise the grid by 2035? Should net zero energy plans be mandated at a local level?

It is recommended that all submitters familiarise themselves with the Guidance on giving evidence to a Select Committee of the House of Commons