The NIC (National Infrastructure Commission) distribution review comes at a critical time when investment in distribution network infrastructure needs to ramp up dramatically to ensure networks are connection-ready to enable renewable generation, clean heat, clean transport, new housing and for the electrification industry to come online.
Yselkla Farmer, CEO of BEAMA said, “The NIC distribution review highlights the need to end the ‘build just-in-time’ approach that has led to a lack of network capacity being a blocker for growth and decarbonisation. Instead, the UK needs to invest ahead of need for economic growth.
“The current feast-and-famine model, where procurement stops at each price control doesn’t support supply chain readiness, skills investment or job creation. Ofgem and Government will risk the UK missing Clean Power 2030 goals if they wait until the start of the next price control in 2028 to fix the issues, and by then it will be too little too late.”
BEAMA is calling for Ofgem and Distribution Network Operators (DNOs) to make changes now that provide clearer signals for investment and prepare for RIIO-ED3. In the first year of RIIO-ED2, network operators have spent less than half of their allowances for network reinforcement – that needs to change.
DNOs need to develop a new procurement model that will give the supply chain the confidence to invest. That requires a process to make the future pipeline of work visible, tied to long-term firm commitments in strategic partnership models.
Failure to act risks repeating the problems the transmission sector already faces today, where we see extending lead-times for key components and acute supply chain shortages. Building the supply chain – be it a new factory, or training people – takes several years lead-time in planning and investment.
BEAMA does welcome the recommendation to re-invigorate the smart metering roll out plan and introduce half hourly settlements. These measures will make our energy systems smarter and more flexible, unlocking better options for consumers as demand side flexibility grows in importance
