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Energy industry calls on Ofgem to put net zero at heart of RIIO-2

Image: Getty.

Image: Getty.

A variety of energy companies and organisations have written to Ofgem to urge the regulator to make net zero central to the next price controls.

In the letter, they argue that RIIO-2 will be a “critical enabler” of net zero, stressing that with at least 40GW of renewables needing to be efficiently connected by 2030 and millions of electric vehicles (EVs) needing to charge easily, the network infrastructure must be ready.

As a result, net zero must be at the heart of RIIO-2 “from the start, not as a subsequent ‘uncertainty’” the letter states.

The price controls should be ahead of government ambition, it argues, and should empower investments into EV charging infrastructure as well as the grid connections and reinforcements needed to transport the required levels of renewables for net zero.

“Regulation does not exist separate to policy. If the government’s preference is to increase the deployment of cost-effective renewables and flexibility as a key element of achieving the net zero target, regulatory processes and the upcoming network price control must not constrain this,” the letter reads.

A number of organisations have signed the letter, including the Energy Networks Association (ENA), Scottish Renewables, RenewableUK, Siemens Energy, the Aldersgate Group and Burns & McDonnell among others.

Speaking on behalf of electricity transmission and gas network operators, John Spurgeon, head of regulatory policy at the ENA, said: “This letter is testament to the overwhelming recognition across the energy industry that investing in and upgrading our electricity and gas networks will be critical to hitting the UK’s net zero emissions targets.

"Networks are foundational to every aspect of the transition - particularly making sure that customers benefit from new services and products. We need Ofgem’s decisions on RIIO-2 to enable investment in the low cost, low carbon energy system the public both need and want.”

The RIIO-2 price controls have already been the subject of fierce debate regarding their impact on net zero. In their scathing responses to Ofgem's Draft Determinations, Scottish and Southern Electricity Networks (SSEN) Transmission and ScottishPower Energy Networks (SPEN) branded the proposals as "risking the delivery of net zero" and being "manifestly flawed" respectively.

In particular, SSEN identified £172 million of cuts that resulted in calculation and methodological errors made by Ofgem that would "severely impact our ability to maintain a reliable and resilient network” according to managing director Rob McDonald.

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