Ofgem has launched its review of the costs of Britain’s 255,000 miles of low voltage electricity network in light of changing to a greener future.
The UK needs around £200billion worth of upgrades on its electricity infrastructure over the next decade, so that new forms of renewable energy such as large scale wind turbines and homeowners’ solar panels can connect to the grid. The price control review, which is known as RIIO (setting Revenue and Incentives to deliver Innovation and Outputs) calls on distribution companies to look at efficient, less costly ways of meeting this challenge. The new price controls will run from 2015 until at least 2023.
Rachel Fletcher, in charge of distribution at Ofgem said: “The needs of consumers are changing, both in terms of how they use electricity and their role in its production. Conventional network investment may no longer always be the most efficient or flexible approach.
“As they develop their business plans for the next period, we expect the distribution companies to explore the role smarter solutions could play in supporting this change.”
The Energy Networks Association which represents the ‘wires and pipes’ network operators for gas and electricity in the UK and Ireland, welcomed the news.
David Smith, ENA chief executive said: “The price control review provides an opportunity to innovate, which is welcomed in this period of transition as we prepare for our lower carbon energy future. The networks are the enablers for this transition and combine the highest aspirations of public service with the commercial rigour to deliver it efficiently and cost effectively.”