by Chris Burchell
Managing Director, SSEN Distribution
How do we successfully plan and deliver the revolution that’s needed in our local electricity system, to meet Clean Power by 2030 and wider net zero ambitions to 2050?
The answer to this question is focusing the minds of network operators like us and the wider industry, the regulator, and governments of all levels.
The challenge is significant. Not only because of the timeline – after all, 2030 is just over 5 years away – but also because many specifics remain unknown.
When will EVs and heat pumps become dominant choices? How much will the new Government’s growth agenda impact local demand for electricity? What role might grid flexibility have? And above all, how do we make sure the costs of the transition are as efficient as possible, for the customers of both today – and tomorrow?
The truth is we’ll never have all the answers, but as an industry – and as policy makers – we all need to get comfortable with degrees of uncertainty as we collectively work towards these targets.
At SSEN, we’ve experienced a break-through in how we manage these ‘known unknowns’, with the roll out of our Strategic Development Plans. These are being developed for every Grid Supply Point on our network – all 38 of them.
Put simply, these plans take energy scenarios, details of new infrastructure to be built, and stakeholder insights from local plans, to formulate informed forecasts of Distribution network requirements. These will deliver on 2030 targets and align with pathways to deliver local networks to meet 2050’s net zero ambitions.
Moving away from a shorter-term ‘price control-to-price control’ approach, our Strategic Development Plans are designed to be revised and finessed, so that when an investment decision is made, it’s done with a clear view of network, local generation, and flexibility options to 2050.
We’re the first Distribution Network Operator to publish strategic plans of this nature. And for us, they’ve already been critical in helping us deepen our understanding of local communities’ needs, so we can better identify the long-term network implications arising from greater use of the grid – and then plan accordingly.
For example, our initial ED2 plans for the islands of Islay and Jura were primarily driven by the ongoing need for a resilient supply for the islands, and broad-based decarbonisation trends. But by working with a variety of local stakeholders, including the whisky industry, we’ve now factored in recent acceleration and long-term decarbonisation requirements for this and other vital sectors.
In doing so, we’ve taken a more strategic view of network requirements to deliver on net zero ambitions, and developed key options of how this can be delivered most efficiently which we hope will receive regulatory approval in the coming months.
We recognise information will change over time. So, we’ll review the SDPs annually and continue to discuss them with our local stakeholders, to reflect their latest growth and decarbonisation plans. This commitment also speaks to the democratic credentials of our approach, which has the forthcoming future system planning framework in very much in mind, whilst reducing the risk of abortive spend and stranded assets to as low as reasonably foreseeable.
As the Regional Energy Strategic Plans – or RESPs – come on board in 2026, we believe our SDPs will also give a very solid platform from which to build a view of cross-vector energy needs at a regional level. This bottom-up approach will allow opportunities for local generation and community level domestic and commercial flexibility to be built into the Strategic Spatial Energy Plan, generating and using energy more flexibly and more efficiently closer to where and when it’s used.
Policy pathway now becoming clear
Of course, Strategic Development Plans will only work if the regulatory system encourages focus on long-term decision making. For me, as a long-standing advocate of strategically planned investment, the signs are very encouraging.
Ofgem sent out a clear message in its RIIO-ED3 Framework recently that change is required on how distribution network investment is planned and delivered. It went as far as to call it an unprecedented transformation of how we do things, with focus on capacity for net zero growth.
This view is now supported far and wide, with Nick Winser, who’s the lead commissioner on the NIC review into GB’s distribution networks’ readiness for net zero, talking to the need for “a strategic programme…. prompting regulatory investment on an anticipatory basis” and NESO’s recent CP2030 advice to government, calling for “further strengthening at distribution level”, alongside “quick and consistent decisions … to unlock investment in vital network projects for 2030”.
We welcome Ofgem’s balanced view, which recognises a greater need for proactive investment with a refocusing of the important role flexibility will play.
We’re far from calling for the floodgates to be opened to just build, build, build. For us, the debate around investment versus flexibility procurement was never a binary choice; system optimisation must be the aim. To achieve this optimisation, a larger network is needed.
Flexibility is a crucial tool for supporting efficient balancing of the national energy system to keep down costs, managing local constraints effectively and helping ensure the efficient delivery of newly-built networks. We’re well on our way to achieving our 5GW Flexibility target in ED2 – but to deliver the scale of decarbonisation needed, its role in deferment of investment will be naturally time-limited against a backdrop of rapidly growing demand.
The reasonable concerns some have around over-investing in the short term when there’s still long-term uncertainty is precisely the problem our SDPs are trying to resolve. Our process creates and demonstrates short-term ‘certainty’ which will be reviewed on an ongoing basis, to appropriately change course as the vision of the future needs become clearer. This means our plans have the best-possible chance of remaining fit for purpose and avoiding unnecessary spending.
That’s the real benefit of our SDP approach.
It doesn’t mean creating a 25-year investment plan that cannot be changed – but instead optimising what we think the next 7-year period looks like against reasonable and informed assumptions which can be revisited as the transition progresses – and if targets change.
The importance is clear. Our trajectory to net zero will depend on getting the big high-level infrastructure decisions right, but it will also depend on making it happen at a local level, with a network that is ready for growth and the needs of our customers.
Put simply, it will be Distribution that delivers decarbonisation.
This journey is something we must do with and for people and communities, not to them. Making network investment planning strategic, democratic, and adaptive goes a long way in achieving this aim. And it’ll ensure our networks and communities are in the best possible place to secure the economic gains offered by the energy transition.