Utility Week

30 | MAY 2022 | UTILITY WEEK Networks Conference report Net zero is not the problem – it's the solution Utility Week's Future Networks conference brought together industry leaders, policy-makers and regulators to discuss a common pathway to decarbonisation. James Wallin was there. A lthough our focus for the conference was on the future of networks, conver- sation returned time and time again to the need for action now to ensure the energy transition is not derailed. Several speakers stressed the need to quicken the pace of change this decade to ensure the UK is in a position to hit its target of a fully decarbonised power gird by 2035 and that consumers are able to engage in a • exible energy system. There were also frequent references to the energy trilemma – the well-established need to ensure decarbonisation is a€ ordable and does not threaten security of supply. In the face of a cost of living crisis and the implications of Russian aggression on domestic security of supply, there was a rec- ognition that these di„ cult trade-o€ s must be addressed. The conference, which was held before the publication of the Energy Security Strat- egy (see p8), opened with a presentation from Paul Van Heyningen, deputy director of net zero electricity networks at the Depart- ment for Business, Energy & Industrial Strat- egy (BEIS). He talked about the importance of bal- ancing all three sides of the trilemma but stressed that looking at this equation in 2022 was a very di€ erent prospect to even a few years ago. He said: "Our net-zero target is not the problem – it's the solution, and the situation in Ukraine brings home the fact that moving to cheap, clean and homegrown energy is not just about meeting our decarbonisation targets, it's also a matter of national security. Also, while we have these historically high gas prices, the cost of renewables has fallen massively. So a transition to green power is increasingly obviously the best option eco- nomically as well." Van Heyningen described the electricity networks as a "key enabler of decarboni- sation" which will need to "facilitate that transformation at an unprecedented scale and pace". He accepted that this will require "major amounts of investment in the network over the coming years", adding: "We need to enable network capacity in anticipation of expected need. That requires a forward-look- ing approach to network regulation." Plans to bring competition into onshore electricity networks will be an important driver of this investment, he suggested, as well as encouraging innovation and e„ - ciency savings. The department believes competition will ultimately save £1 billion on projects tendered over the next decade. In a phrase that was to become common through- out his presentation he promised a response from BEIS and Ofgem to the consultation on this issue "soon". Van Heyningen accepted that the pace must be quickened in other areas to allow networks to achieve their full potential as decarbonisers. He anticipated a common complaint throughout the conference that the planning process is not agile enough to support a rapid energy transition. He said: "Building new infrastructure at pace does need some reforms to the way planning consents work. For major infra- structure projects, government is working to streamline the nationally signiœ cant infra- structure projects regime to deliver better and faster outcomes. "And then for lower voltage network infra- structure, planning is also ož en cited as a source of delay. We're going to be looking at the land rights and consenting process and seeing where we might be able to streamline that and make improvements on timelines." The process for connecting new sources of generation or demand also needs to be "accessible, timely and deliver value for money", Van Heyningen insisted, although he o€ ered little suggestion as to how BEIS would support this aim. Net zero is not just about the connection of renewable generation, and Van Heynin- gen recognised the importance of • exibility and the need to remove barriers to its frui- tion. These include a greater proliferation of large-scale and long-duration storage and the need for "the right markets to uncover and reward • exibility". A mismatch of timing The conference later heard from some lead- ing industry œ gures that change is not happening anywhere near fast enough, espe- cially on demand-side response. Rachel Fletcher, former chief executive of Ofwat and now Octopus Energy's direc- tor of regulation and economics, said that to date, "we have no concrete government or Ofgem-backed proposals on the table" to harness the inherent • exibility customers can provide. She stressed the importance of market signals to optimise the potential of • exibility in an increasing complex energy system. "We've got an electricity wholesale mar- ket that doesn't provide anything like the granularity or strength of price signals "We've got an electricity wholesale market that doesn't provide anything like the granularity or strength of price signals needed to optimise thesystem." Rachel Fletcher, director of regulation and economics, Octopus Energy "We've got an electricity wholesale market that doesn't provide anything like the granularity or strength of price signals needed to optimise thesystem." , director of regulation and economics, Octopus Energy

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