A new paper, Energy Networks for the Future, highlights the need for a new partnership between the public and private sector to deliver the energy infrastructure needed to achieve net zero decarbonisation.

The paper, which was launched today (12 November) at the Merseyside Maritime Museum by sustainable energy specialists Regen and supported by SP Energy Networks, examines whether the current regulatory model for electricity networks is still fit for purpose to lead the energy transformation and deliver the scale of investment needed to achieve net zero carbon.

A core finding of the paper is that radical reform of the current regulatory model for the energy networks is needed to meet the climate emergency, and to ensure public trust that the industry can deliver a zero carbon energy system that is sustainable, resilient and affordable.

The recommended reforms include:

· the establishment of a new national office to drive energy strategy and oversee the net zero transition

· increased devolution of decarbonisation and sustainable energy delivery to regional bodies who would work with industry, city regions and communities to lead a local energy revolution

· embed decarbonisation objectives and outputs within the regulatory model

· require networks to include in their business plans a range of net zero carbon options that can be quickly enacted to meet changing requirements

· ensure network companies fulfil their role in achieving a just transition to a low carbon society.

Johnny Gowdy, Director at Regen and co-author of the report, said:

“We know the electricity networks have a critical role to play in our decarbonisation journey, this has been highlighted by the renewed political interest in who owns the networks, how they are governed and the method by which they are regulated and incentivised to make the right investments for our future.

“Ultimately however, the question of ownership may be less important than the ability of the public and private sectors to work together in a new partnership to deliver decarbonisation at least cost, and a whole new set of social and economic priorities, from energy justice and the protection of vulnerable customers, to the creation of jobs, skills and innovation in the new low carbon economy.

“Critically, there is a clear understanding that networks need the public to trust that they are not abusing a monopolistic position, but are acting in the interest of consumers and delivering wider social good.”

The report also identifies reforms to the way in which networks are incentivised to make strategic investments in infrastructure and to support the development of new smarter energy solutions.

Scott Mathieson, Network Planning and Regulation Director, SP Energy Networks, said:

“The pace of change and radical transformation required across the industry means we cannot stand still. Net zero needs to be at the heart of energy policy, and we need more local decision making capabilities to meet the unique needs of every community. In order to build the smarter networks of tomorrow, we need a fair regulatory regime that reflects the investment required, the risk associated, and the incentives necessary to meet net zero.”

Notes for editors Read the paper here: https://www.regen.co.uk/publications/energy-networks-for-the-future/

The paper identifies a number of new priorities for reform of the regulatory model:

· Establishing a national office to drive net zero decarbonisation across all government departments

· Devolving decarbonisation and energy transition delivery to regional bodies at devolved government and city regions

· Embedding decarbonisation objectives in the regulatory model

· Building a new public/private partnership based on regional and local governance

· Reforming the regulatory model to ensure strategic investment and cost efficiency

The core recommendations of the paper are to:

· Put the net zero carbon challenge at the heart of energy policy, including the creation of a new national ‘energy agency’ or ‘office of net zero’ that can coordinate and drive net zero delivery across government departments.

· Enable a local energy revolution by allowing networks to work more effectively with local bodies to support further devolution and democratisation of energy and helping local regions to meet ambitious carbon targets.

o New Regional Energy Governance Bodies should provide formal representation for regions to influence network priorities and investment.

· Enable networks to build smarter, optimised and secure energy solutions.

· Make strategic investment, manage incentives and risk. Networks should be required to include in their business plans a range of options that can be quickly enacted to meet changing requirements.

· Maintain cost efficiencies by ensuring that investment mechanisms are properly incentivised to deliver affordable energy, great service and customer value.

· Ensure network companies fulfil their role in achieving a just transition to a low carbon society.

The paper was written by Regen, with input from a wide variety of industry leaders and energy stakeholders, and supported by SP Energy Networks.

About SP Energy Networks

SP Energy Networks (SPEN) is the licensed Electricity Distributor (DNO) for Merseyside, Cheshire, North Wales, North Shropshire and Central and Southern Scotland. It operates 30,000 substations (one substation for every 100 customers), 40,000 kilometres of overhead lines (once around the globe), and 70,000 kilometres of underground cables.

SPEN also operates the Transmission Network in central and southern Scotland. It takes electricity generated from power stations, windfarms and various other utilities and transports it through a vast transmission network, consisting of over 4,000 kilometres of overhead and 320 kilometres of underground lines. SPEN has 129 transmission substations in its network to manage extra high voltage electricity supplies.

Over the last ten years, SPEN has invested around £5.6 billion in its transmission and distribution networks, and during the next ten years, plans to invest a further £5.4 billion to enable the achievement of Net Zero for the UK and a better future, quicker for its customers and communities.

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