Back in December, we submitted our final RIIO-ED2 Business Plan to the energy regulator, Ofgem, that sets out £3.3bn of investment in our electricity distribution network that’s needed to get the UK fit for a green future. Next week, Ofgem will release their Draft Determination which will set out their initial assessment of our plan.
Also this week, in our Transmission business, we're expecting the publication of National Grid ESO's Holistic Network Design (HND), that will set out the onshore and offshore transmission network infrastructure and investment needed to deliver a pathway to the UK and Scottish Governments' 2030 offshore wind targets of 50GW and 11GW respectively.
In this context - it's going to be a huge week for our business, and indeed, the country as we look to enable the path to Net Zero for all the customers and communities we serve. As a business that serves customers across Distribution and Transmission in Central and Southern Scotland, and our Distribution network in Cheshire, Merseyside, North Wales and North Shropshire - we stand ready to help make this future a reality.
Looking to the RIIO-ED2 Draft Determination
Electricity will be at the heart of a Net Zero future, through electric vehicles and heat pumps – with this being powered by more renewable generation and other new technologies that we’ll have to integrate into the distribution grid.
These changes mean that electricity networks are facing an unprecedented level of change as they look to help facilitate legislated Net Zero emissions targets. As the only Distribution Network Operator to serve all three devolved regions of GB, we also understand that Net Zero will not evolve at the same pace across every of the country and that’s why our plan is designed to enable the ambitions of each of the areas we serve.
Iain Divers, Head of RIIO-ED2 said: “The role of our networks in achieving Net Zero cannot be understated – we forecast that up to 1.8 million electric vehicles, 1.1 million heat pumps and over triple the amount of distributed generation will be supported by our networks by the end of this decade. The only way this can be all be enabled is by delivering our next five-year plan, called RIIO-ED2
“This investment will provide the electricity network the capacity, flexibility and technology that’s needed to allow everyone to access these new green solutions – safely, efficiently and reliably.
“But this multi-billion pound investment goes well beyond this; it will deliver new green jobs, economic growth, and environmental benefits, as it enables the UK’s path to Net Zero – supporting a just transition in the communities that we serve. And what’s more, to help deliver this mammoth task, we also want to recruit for more than 1,100 green jobs, with thousands more indirect jobs supported over the five years.
“Without this plan, we run the risk of leaving people behind as we move to a low carbon economy and that is something that absolutely cannot happen.
"I’m incredibly excited about what the future holds for our network. We have an opportunity to reimagine our future, build a network that’s fit for Net Zero and deliver real benefits to the communities we serve."
Delivering efficiently for our customers and communities
We also recognise that this plan comes at a time when customers will be under pressure from rising energy costs, rising inflation and knock-on impacts from electricity supplier failures.
Despite delivering more than ever before in RIIO-ED2 – the average bill impact for our customers will remain broadly flat over the next five years and reduce in real terms over the next ten years. This cost for the average customer equates to just 30p per day.
Scott Mathieson, Director of Network Planning & Regulation, concluded: "In developing this plan, we’ve engaged with over 19,000 customers and stakeholders to shape 100 commitments, that will deliver for the communities we serve. At such a critical time for the energy sector, it’s vital that everyone’s voices are heard.
"Those voices have been clear: we must be bold as we reimagine the role of our network, the services we provide, and the capabilities of our business. We must match the ambition of our customers alongside the devolved governments and major cities that we serve, whose elected representatives have set out their visions to achieve Net Zero.
"But we can’t do this alone. To deliver what our communities need, this will require our regulator, Ofgem, to help us deliver a modern, agile and ambitious framework that’s fit for delivering Net Zero."
Ofgem will release their Draft Determination on Wednesday 29 June. This will kick-off an eight week consultation window where you can have your say on network companies’ plans, and the determination from Ofgem.
We’d encourage you to have your say, and look forward to working constructively with Ofgem to deliver a plan that works for our customers and communities.