Ahead of Ofgem’s response to a major sector-wide consultation on the next regulatory period, the RIIO2 price control, Energy Networks Association (ENA) has released a new independent report on industry priorities for gas network companies, reflecting the views of over 30 expert stakeholders from a workshop held in February 2019.
Widely-respected research company Accent was appointed by ENA to carry out this rigorous and independent work at a critical time for gas network companies. As they advance key innovation projects, the findings underline the significance of recent announcements in creating the right policy and regulatory settings, including the Chancellor’s plans to increase the proportion of green gas on the grid.
Workshop participants included government and regulatory agencies, energy industry representatives, private businesses, consumer groups and academics. Key feedback about the gas network companies from stakeholders included:
- There is a need to act urgently to put the stepping stones in place to meet Britain’s decarbonisation targets; new models for incentivising innovation may be required.
- A broad definition of a ‘whole system’ approach to planning and developing our energy system is needed, which takes account of national and regional geographies and sectors as wide-ranging as transport and water.
- Greater collaboration is needed both between the gas network companies, and also between the gas and electricity network companies, especially on innovation trials and projects.
- A number of risks could impact the gas network companies’ ability to help deliver on decarbonisation including a lack of clear direction on heat policy, time constraints in planning for the forthcoming RIIO2 price control period and cost pressures on networks.
Commenting, ENA Chief Executive David Smith said:
“The message from across Britain’s energy industry is clear: Ofgem’s RIIO2 regulatory framework for gas network companies should enable the investment and innovation needed for decarbonisation.
“Following the Committee on Climate Change’s recent advice that a ‘net zero’ emissions target changes hydrogen from being an option to an integral part of the strategy, the evidence is building that low-carbon gasses play a vital role in a ‘whole systems’ approach to decarbonisation.
“Through ongoing innovation and ENA’s new Gas Decarbonisation Pathways project, Britain’s gas network companies are developing a comprehensive vision and plan which will benefit the public and the environment, with the support of a positive regulatory environment.”