Europe’s Ofgem publishes decarbonization action plan

By Pamela Largue

On his first day in office, Ofgem’s new Chief Executive Jonathan Brearley has launched Ofgem’s Decarbonisation Action Plan.

Ofgem is the Office of Gas and Electricity Markets, a non-ministerial government department and an independent National Regulatory Authority, recognized by EU Directives. Its principal objective is to protect the interests of electricity and gas consumers.

The plan sets out nine actions. These will ensure energy networks are ready to deliver net zero, support government to tackle the difficult question of how to decarbonize heat and transport and encourage innovation to provide new low carbon products and services for consumers. The plan recognizes that there are trade-offs to overcome, such as fairly spreading the cost of a low-carbon energy system between today’s and tomorrow’s consumers.

“Britain has come a long way,” Brearley said. “It has decarbonized faster than any other major economy, but we must go further, particularly on heat and transport. We are taking an approach that recognizes that our role protecting consumers includes achieving net zero.

“As low-carbon renewable energy grows and more transport goes electric, the energy system needs to be more flexible to respond to peaks and troughs in both supply and demand. Our new price controls for network companies will clear the path for this, providing the incentives for investment for the future.

“It is now vital that the energy industry rises to the challenge and demonstrates how it will work with the Government and Ofgem to decarbonize Britain’s energy system at lowest cost.”

Ofgem will look at how it can support the roll out of electric vehicles and will publish an Electric Vehicle Strategy. This will address how the grid needs to evolve to meet increased demand. It will also look at new business models, such as electric vehicle owners selling electricity back to the grid during peak times, reducing carbon emissions while saving money on their bills.

To meet net zero, Britain will see changes to the way homes and businesses are heated. This might include using hydrogen boilers or electricity to power heat pumps, and may see more customers connected to heat networks.

To bolster the UK’s vibrant offshore wind sector, Ofgem will explore with government and stakeholders how offshore networks could best enable the rapid growth of offshore wind power. A more coordinated approach will make it easier and cheaper for the electricity that offshore wind generates to reach consumers.

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