Written evidence submitted by Energy Networks Association (ENA) (WIN0041)
I am writing in response to the Energy Security and Net Zero Committee’s inquiry into Preparing for the winter. Energy Networks Association (ENA) represents the companies that operate and maintain the gas and electricity networks in the UK and Ireland. Serving over 30 million customers, they are responsible for the transmission and distribution network of “wires and pipes” that keep our lights on, our homes warm and our businesses running.
Great Britain’s energy networks maintain around 800,000km of energy infrastructure and operate one of the most resilient grids in the world, built to withstand severe weather. Our members also play a crucial role in communicating the help and support available for customers, including those in vulnerable circumstances.
Since 2013, ENA has co-ordinated an annual campaign on behalf of network operators to promote the Priority Services Register alongside the electricity and gas emergency numbers for use in an emergency, which last year reached an estimated 16 million people. We continue to take lessons from each campaign and last year worked with Ofgem to reach more than 600 people who work in sectors providing services to vulnerable customers, such as care homes, local authorities and resilience planners.
ENA and our members participate in the Network Emergency Co-ordinator’s annual winter exercise, testing our communications and operational responses to a range of scenarios. In addition, network operators have regular communication with local resilience forums and their equivalents to prepare for incidents and emergencies.
On behalf of the industry, ENA operates powercut105.com which provides information to customers on what to do in the event of a power cut. ENA also operates the telephone service 105, which is a free three digital telephone number that automatically connects customers to their local electricity distribution network operator to report a power cut or other incident on the electricity system.
The industry operates a Priority Services Register (PSR) which provides extra help and support to customers throughout the year. It helps energy companies, including energy suppliers, electricity and gas networks to look after customers who have extra communication, access or safety needs. It helps the energy industry tailor their services to support households who need extra help with everyday energy matters like bills, and also in the unlikely event of a power cut or gas supply interruption. The PSR promise is made by all participating energy companies in England, Wales and Scotland and thepsr.co.uk is a website operated by ENA on behalf of the industry to provide further information.
To continue to meet the challenge of delivering energy to communities across the UK safely, sustainably and reliably in the future, network operators are investing around £43bn over the coming years, subject to regulatory approval.
What role did the UK grid play in the high domestic prices of winter 2022-23?
The energy networks do not profit from changes in the wholesale energy price, and much of the driver for higher wholesale and domestic energy price rises are due to Russia’s illegal invasion of Ukraine. In the winter of 2022/23, the network proportion of customers energy bills contributed to a very minor increase through electricity network charges.
How effective is the Government's approach towards supporting the sector and delivering a functioning energy market?
Our networks will need to continue to attract significant investment to meet the government’s decarbonisation and energy security goals, which means ensuring that government policy and network regulation are sufficiently long term in thinking so network companies can attract investment in competitive, global finance markets. As we consider how our markets are designed through the Review of Electricity Market Arrangements (REMA), it’s important to ensure that our market arrangements do not stymie the investment needed to maintain progress in decarbonising.
The current regulatory regime has delivered, and continues to deliver, transformational change in GB networks that customers have benefited from. It is important that the regulatory framework continues to deliver for customers. Different sectors face different challenges and will need to evolve to different extents in order to continue to meet customers’ needs. Some aspects of the current approach to regulating networks may need to change to adapt to the change in scale of some activities, the change in market conditions and to remove acknowledged shortcomings of the current regulatory approach.
On a broader level, to reach the government’s net zero target there must be enough capacity on the networks, which will require a significant expansion of the existing electricity network, consideration for hydrogen network capacity and repurposing the existing natural gas network. Our members are clear that a whole systems approach is the most effective way of developing our future system, both to decarbonise and to build in resilience for customers.
Crucially, a genuinely whole-systems approach to network planning will be essential in supporting the sector and will require networks, Ofgem and government to work together alongside our stakeholders to: