We welcome the conclusions of the National Infrastructure Commission’s study into the future of electricity distribution networks.
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We fully support the NIC’s view that a shift from the current ‘steady state’ approach to network investment, to a more proactive stance is vital to deliver the transformational change needed to decarbonise society.
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This aligns with our own progressive approach to strategic development planning, with long-term investment needs already identified to meet our customers’ net zero aspirations.
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We now look forward to working with the UK Government and Ofgem to implement these plans and realise the NIC’s recommendations.
We support the NIC’s call for the move to a more proactive network investment regime, so that additional capacity will be in place where and when it's needed, helping to accelerate decarbonisation and local economic growth in the best possible way for customers. This aligns with our own Strategic Development Plans, which are already being rolled out across our two licence areas in central southern England and the north of Scotland to provide a long-term view of network investment out to 2050.
The NIC has outlined a bold, optimistic vision in this study, recognising that only transformational changes will deliver the scale of decarbonisation that’s needed to support homes and businesses’ move to net zero. We're already working with our stakeholders and local authorities to develop strategic local proposals which identify and plan additional network investment to meet future needs at the most economic time. We hope the NIC’s recommendations will serve as a catalyst for regulatory approval of this proactive and long-term approach to investment.
SSEN Distribution’s Managing Director, Chris Burchell, says:
“This is a very important and timely report, and we welcome the bold, ambitious vision the NIC has laid out for the future of distribution networks, including recommending a shift from a reactive ‘steady state’ investment process, to a proactive and efficient approach that will support our customers in a net zero world.
“At SSEN, we’ve long called for reform to the mechanisms to ensure distribution networks enable - and don’t hinder - decarbonisation and growth. The NIC’s findings align with our own conclusions on how proactive investment in distribution networks can spur growth in local economies, and they also provide important validation for our regional strategic development approach to deliver decarbonisation for our communities.
“Now the NIC has made its recommendations, we stand ready to work with the UK Government and the energy regulator, Ofgem, to digest the findings and act quickly to create the proactive investment mechanisms that will accelerate green growth up and down the country. For our part, we will continue to bring forward efficient investment proposals that will keep costs low for consumers in the long term.
“Ofgem’s proposed framework for its next price control, RIIO-ED3, demonstrates it's moving in a similar direction to the vision proposed by the NIC. We hope the important conclusions from today’s report provide extra confidence and reassurance to the regulator that it's on the right path.”
The next electricity distribution price control, RIIO-ED3, which begins in 2028, will be of significant importance. The NIC is correct to call for a doubling of current investment levels in that five-year period to deliver the additional capacity to support local economic growth and the decarbonisation of the power system. We share the NIC’s view that any impact on customer bills will be limited, and we expect that in the longer term, this additional efficient investment will ultimately help keep costs lower for consumers overall.