Report urges more proactive UK grid investments to help decarbonisation
OSLO, Feb 21 (Reuters) - Britain's electricity distribution network is facing a fundamental role change to deliver the country's net zero emissions target, requiring more proactive investments, a report from a government-appointed commission found on Friday.
Distribution networks deliver electricity to homes and businesses and are highly regulated, with companies given an annual allowance for expenditures, so-called price controls, to protect customers from unnecessarily high grid use costs.
However, the current regulatory process was too complex and focused on short-term costs, rather than the wider goals of economic growth and decarbonisation, the National Infrastructure Commission (NIC) said in its latest report.
The UK aims to reach net zero emissions by 2050.
"Price controls will need to be reformed to enable proactive investment," it added.
Power demand in Britain is set to rise by around 50% by 2035 and double by 2050 as heating, transport and industry increasingly turn to electricity to decarbonise, the National Infrastructure Commission (NIC) said in its latest report.
This could require nationwide investments of 37-50 billion British pounds ($47-$63 billion) in the distribution network between today and 2050, at least double current price control levels, the report said.
While the exact timing of the new demand was uncertain, waiting for it to materialise risked investing too late, creating bottlenecks and delays, it added.
Scottish and Southern Electricity Networks (SSEN) Distribution, a subsidiary of SSE (SSE.L), opens new tab, welcomed the report and hoped its finding would be reflected when regulator Ofgem set the next round of price controls starting in 2028.
"SSEN shares the NIC's view that any impact on customer bills will be limited, and expects that in the longer term, this additional efficient investment will ultimately help keep costs lower for consumers overall," the company said.
($1 = 0.7910 pounds)
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