Utility Week

UTILITY WEEK | 14TH - 20TH FEBRUARY 2020 | 27 Operations & Assets are distributed across households, taxpayers and businesses. Furthermore, subsequent to our event, statements following the Conservative gen- eral election win have made it clear that the 2020 Budget statement will include a strong focus on mobilising investment in low car- bon technologies and infrastructure. And Network also understands that there are plans for a signi• cant new industry initia- tive this year to explore ways of "re-costing" energy in order to deliver net zero. This work will be led by former MP Laura Sandys – now director of consultancy Challenging Ideas – who also spearheaded the high-pro• le Energy Data Taskforce in 2018-19. Network leaders will be watching to see how these developments should shape their own innovation and investment plans for a net zero future. They will also be on the alert to see how they are received by a regu- lator who has already acknowledged a need to build greater Ž exibility into its toolkit in order to accommodate fast-paced technology change and support an agile response to the threat of climate change. Jane Gray, content director, Utility Week I t was a privilege to sponsor this roundtable, and to hear the di' ering views from a wealth of experts on delivering decarbonisation for our industry in the fairest way. There are so many new technological changes taking shape in the energy system today, ranging from peer-to-peer energy trading, electric vehicle charging, and ambitions to deploy hydrogen in the gas net- work to name but a few. These areas are developing fast, but there's still a lot of uncertainty over which technologies and business models will prove most competitive and o' er the best solutions. So, the big question for me is, if we aren't sure what's going to happen in the future – how do we incentivise the right innovation and investment for tomorrow while keeping energy bills a' ordable today? As we transition to a new energy model and a net zero future, we know that we need a system that is Ž exible, reliable and cost e' ective. To achieve this we need to have the agility in our regulatory framework, and in the broader energy landscape so that we can make investments that continue to deliver for consumers now and into the years to come. To meet the needs of the future, including the 2050 net zero commitment, it is important the right mechanisms and models are in place for networks. For example, the Low Carbon Vehicle Partnership, having brought together key players in the energy, infrastructure and transport sectors, made proposals in January to ensure that the GB energy system is able to accelerate the mass take-up of electric vehicles (EVs). This partnership expects EVs to become the norm on Britain's roads within this decade. This entails a signi• cant challenge – and opportunity for networks. Mass EV take-up will require the coordination of energy and transport planning to ensure we have the right infrastructure in the right place at the right time. So how do we do that while balancing antici- patory against unnecessary cost to consumers? And while solutions for EVs are more advanced, the decarbonisation process will certainly raise more unexpected technical and operational chal- lenges for networks as new low carbon technology solutions develop in years to come. It is therefore important that funding frameworks enable necessary and diverse innovation projects to be undertaken by networks with a broad range of innova- tion partners. In order to drive the right solutions, we need more coordi- nation across the energy land- scape from local authorities, government policy, transport, heat and energy. This will also require a progressive regulatory framework and a balance of risk and reward to attract the right investment. The next price con- trol is crucial to making certain that we start on the right foot in delivering a cleaner greener Britain that is a' ordable. Column Darren Pettifer National Grid head of regulatory fi nance Brought to you in association with How do we decarbonise fairly? Points of consensus This debate on the challenges and issues involved in devising a fair way to pay for net zero teased out a variety of perspectives and interests from the diverse stakeholders involved. However, a number of key consen- sus points did emerge from the discussion. 1. Finding new ways to fund decarbonisation must link directly to an agenda for building and sustaining higher levels of trust in gov- ernment and industry generally, and utilities in particular, since trust has been shown to influence consumer willingness to pay. 2. Decisions on funding decarbonisation cannot move forward before big decisions are made about how heat will be decarbonised, since this will impact both the total cost of decarbonisation and the options for alloca- tion of cost. 3. Networks should take the opportunity to engage with the movement to create citizens' assemblies on climate change since these represent an opportunity to increase under- standing of the costs of decarbonisation and options for allocating those costs. 4. Government should rethink the way in which environmental and social policy costs are funded via customer bills. This has been shown to be regressive and places an undue burden on those least able to pay. This year is set to be a critical one in terms of RIIO2 business plan development at the DNOs * This debate took place before publication of Ofgem's decarbonisation action plan

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