Ofgem’s New Net-Zero Mandate to Speed Up ‘Glacial Pace’ of Realising Grid Connections

June 8, 2023, by Adrijana Buljan

The UK government will amend the Energy Security Bill to include a statutory net-zero duty for Ofgem, which the British energy regulator will be required to apply and document in decision-making. According to RenewableUK, this will speed up the realisation of grid connections and help unlock at least GBP 15 billion of investment in offshore wind alone by the end of the decade.

The new duty for Ofgem will come into force two months after the Energy Bill gets Royal Assent.

The energy regulator’s principal statutory objective is to protect the interests of existing and future gas and electricity consumers, including the reduction of greenhouse gas emissions in the electricity and gas supply, according to Ofgem.

The Energy Bill amendment will replace greenhouse gas emission wording with a specific reference to the Climate Change Act 2008.

Updating the existing duties of the Gas and Electricity Markets Authority, the governing body of Ofgem, by including reference to the net zero targets in the Climate Change Act 2008 will require the regulator to consider how their decisions may assist the Secretary of State in meeting the government’s net-zero targets, the UK government states.

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RenewableUK has welcomed the government’s move and highlighted the effect this new mandate for Ofgem will have on offshore wind development.

“We’ve been calling for this key amendment as a matter of urgency to tackle the glacial pace at which grid is approved and built. Some offshore wind projects are having to wait for more than ten years to get a grid connection. This measure will help to unlock at least £15 billion of investment in offshore wind alone between now and the end of the decade”, said RenewableUK’s Director of Future Electricity Systems, Barnaby Wharton.

“As wind is our cheapest source of new power, consumers will benefit from lower bills as we connect up more projects faster. The decision will also strengthen Britain’s energy security, moving us closer towards energy independence”.

The UK raised its 2030 offshore wind target to 50 GW last year and the government has also decided to accelerate the permitting processes to achieve the new goal.

At the beginning of this year, Ofgem approved the strategic electricity transmission reinforcements required to deliver the increased target.

The decision confirmed that all SSEN Transmission projects identified by the Electricity System Operator (ESO) as required to meet 2030 offshore wind targets would be taken forward as part of the regulator’s Accelerated Strategic Transmission Investment (ASTI) framework.