Ofgem to fast-track £4bn investment in UK electricity grid
Ofgem has announced plans to fast-track around £4bn of investment into expanding the UK’s electricity transmission network as it looks to decarbonise the grid by 2030.
The Advanced Procurement Mechanism (APM) will enable signed-off projects to “break ground as soon as planning approval is granted,” the energy regulator said in a statement on Thursday.
It is the latest move by officials to free up the UK’s planning system. The target is to produce 95 per cent of electricity from low-carbon sources by the end of the decade.
The UK’s energy transmission network is currently run by three transmission owners, known as TOs; National Grid ET, SSEN Transmission and SP Energy Networks.
Ofgem has agreed £4bn of “use it or lose it” capital allowances up until 2031 for the 80 transmission projects currently based in the UK, it said.
“This fast-track measure means we can quickly get Britain building the infrastructure we need to deliver clean power by 2030 and an energy system that can bring down bills for households and businesses for good,” Energy Minister Michael Shanks said.
“Giving developers a head start in the global race to secure essential materials and equipment will help to avoid delays by putting shovels in the ground as soon as clean power projects secure planning permission, and protect billpayers by keeping costs down.
He added: “Giving developers a head start in the global race to secure essential materials and equipment will help to avoid delays by putting shovels in the ground as soon as clean power projects secure planning permission, and protect billpayers by keeping costs down.
Akshay Kaul, Ofgem’s director-general of infrastructure, said: “Building a modern, clean and secure energy system is the key to ending our reliance on international gas markets responsible for volatile prices, so we must do everything we can to clear the way for trailblazing projects to move forward.
“The Advanced Procurement Mechanism is an innovative model that could be extended in the future to develop other areas of the energy sector and possibly mirrored by other regulatory bodies supporting the delivery of national infrastructure.
He added: “It’s a significant step on the accelerator as we drive towards net zero and we are committed to working with government, GB Energy and the National Wealth Fund to maximize the economic opportunities of infrastructure investment.