Energy networks outline closer gas and electricity collaboration ahead of price controls


Gas and electricity network companies have set out plans for closer collaboration ahead of the next regulatory pricing regime.

The Energy Networks Association’s Innovation Strategy documents outline how gas and electricity networks and system operator have spent innovation funding to date, and what they plan to deliver next.

It comes as Ofgem consults on the next price controls governing what networks can spend, how they can spend it, and the returns they are allowed to make.

While the regulator has proposed tougher, shorter price controls, following criticism it had allowed network companies to make excessive returns, it looks set to continue allowing networks to spend money testing smarter approaches via innovation allowances.

That will come as a relief to network companies, which feared those allowances could be scrapped.

To qualify for funds, the regulator wants to see greater collaboration between gas and electricity distribution networks and the gas and electricity system operator.

However, Ofgem is set to resist calls to align the price controls across networks, which currently start and end two years apart. Some network companies had argued bringing them together would enable greater collaboration and ‘whole system’ outcomes.

The Energy Networks Association’s innovation strategy documents outline networks’ plans to manage decarbonisation of gas and power, health and safety, cyber threats and provide indicative timetables for delivery.

See the gas strategy here and the electricity strategy here.

Related stories:

Ofgem chief relishes ‘difficult, contentious’ charging review

Ofgem takes harder line on networks after overseeing bumper profits

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