Utility Week

UTILITY WEEK | FEBRUARY 2023 | 21 Talking Points… What energy networks want to hear from the Budget I f the UK is to keep pace with the likes of the US In ation Reduction Act and the European Union's response to that, then the 2023 Spring Budget is an opportunity for the chancellor to box clever. Focusing on regulatory and policy reforms that unlock the pri- vate investment we need in our energy infrastructure to reach our ever-closing decarbonisation targets, rather than just on subsidies to attract that investment, is key to doing just that. That's the central message of ENA's 2023 Spring Budget submission. To deliver those reforms, we need poli- cymakers to think again about the role that our energy network infrastructure plays at the heart of our economy and how that is now changing as we strive to meet our decarbonisation targets. In the last 30 years or so, Britain's energy network companies have done a pretty good job at † nding new ways of running existing network infrastructure more e‡ ciently, more aˆ ordably and with better outcomes. That's a result of policy decisions based on the idea that network infrastructure should simply focus on those things, because that's how they can deliver greatest value to our wider economy. But times are a changing. The eco- nomic role of our energy networks is now changing. And so must those policy decisions. Our networks now must be able to ensure that Britain's businesses can access the new smart energy technologies and markets they need to allow them to † nd new ways to produce goods more e‡ ciently. They need to be able to connect more homegrown sources of energy produc- tion, more quickly, to help our economy reap the bene† ts of reduced exposure to energy price-driven in ation and keep energy costs for our businesses and homes as low as possible. And they need to do all of this while still providing access to aˆ ordable, reliable energy sup- plies in a fair and uniform way. So there needs to be a far greater focus on unlocking private investment through policy than has traditionally been the case, so infrastructure can change in tune with the expectations of the economy it serves. To do that, we're proposing six key changes to government and regulatory policy to unlock that investment: • Regulatory reform to unlock strategic investment in network infrastructure to build new capacity, through a Stra- tegic Policy Statement and a net-zero mandate for Ofgem. • Supporting the growth of energy ex- ibility markets. • Accelerating investment in hydro- gen infrastructure and blending, by speeding up the development of the business models needed to attract it. • Reforming the land rights and con- senting process through to speed up the building of new network infra- structure • Con† rming future innovation funding for energy network infrastructure through the Network Innovation Allowance, so it can adapt to new technologies quickly and e‡ ciently. • Developing a strategy for the use of hydrogen for seasonal energy storage, through the Britain Energy Security Strategy, so the right business models can be developed to attract investment in that capacity. Ed Gill, head of markets policy, Energy Networks Association Comment: The US and the EU have both launched major initiatives to boost green power – the UK cannot afford to be left behind. "One of the worst outcomes from this current public conversation would be stigmatising prepay when actually, as an industry for the last decade, there's been a real drive to de-stigmatise it and to really consider the benefi ts of smart prepay, how much more control it gives and how much easier it is to top up and manage what you're spending." Dhara Vyas, deputy chief executive, Energy UK "We could choose to buy up all the existing energy generating assets, but that will cost us tens of billions of pounds: that's money not going into to home insulation." Ed Miliband, shadow energy secretary, explaining Labour's shi y away from supporting nationalisation "There are decent arguments for operator self-monitoring, the least good argument is cost. Polluters should pay the cost of their activities, therefore water companies that can risk pollution should pay the cost of monitoring." James Bevan, CEO, Environment Agency Quote, unquote billions of pounds: that's money not going into to home insulation." Ed Miliband secretary, explaining Labour's shi y away from supporting nationalisation water companies that can risk pollution should pay the cost of monitoring." more control it gives and how much easier it is to top up and manage what you're

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