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UK Power Networks unveils £4.5 billion plan for net zero

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UK Power Networks, the distribution network operator covering the South East England, the East of England and London, has unveiled a £4.5 billion draft business plan that will drive the business towards net zero. 

The draft business plan covers RIIO-ED2, which is the next price control for distribution network operators running from 2023-28. This will be a crucial time for all DNOs, as they all work towards accelerating their commitment to the environment, while managing the extra loads that will connect to the electricity network, such as new EV chargers or electric-based heating. 

For UK Power Networks, it’s anticipating that it will have up to 2.7 million electric vehicles connected to its networks by 2028, up from just 150,000 today. Pair that with the estimated 700,000 additional heat pumps, and you can see why this will be an important period for all DNOs. 

To cope with all this demand, UK Power Networks will need to invest in the electricity network. As part of the business plan submitted to Ofgem, the DNO is committing to invest an additional 7% in the network, while simultaneously delivering a 10% reduction in its part of the energy bill. 

Key to its investment in the network will be flexibility, which UK Power Networks has cited as key to the future of the UK’s electrical grid. It plans to achieve this flexibility by enabling existing consumers to upgrade themselves to producers, contributing clean electricity to the grid. 

Under the business plan, UK Power Networks has included £4.5 billion of investments that it is highly confident will be needed. It has forecast an additional £1.1 billion of potential investment if the highest case scenario of people switching to electric vehicles and heat pumps, as defined by the Committee of Climate Change in its Sixth Carbon Budget, materialises.

As part of its ambition, UK Power Networks says that it will encourage energy efficiency, network flexibility and using competitive markets powered by technology and data to encourage the use of electricity when it is cheaper and greener to do so.

In terms of highlights within UK Power Networks’ business plan, the firm has suggested the following: 

  • It plans to establish an independent distribution system operator, with stretching performance measures, that will deliver transparency of investment decision-making and ensure that the lowest cost solutions overall for customers are adopted. 
  • It will accelerate the development of the most open and liquid local flexibility markets that maximises the benefits of smart charging and other demand side solutions. 
  • It will invest in state-of-the-art technology from sensors in its substations through to AI and utilising smart metering data to get the most granular and accurate view of all of its low voltage networks to maximise their utilisation. 
  • It will openly publish its network and asset data to unlock new innovation and customer propositions. 
  • It will collaborate with other organisations to play its role in developing compelling consumer demand response propositions. 
  • It will establish a dedicated team to work with local authorities to develop local area energy plans that help communities to transition to net zero.
  • It proposes innovative approaches to help unlock public on-street charging to tackle one of the key consumer barriers to buying an electric vehicle and ensuring fairness across all communities. UK Power Networks believes this will increase the current levels of on-street public chargers by 25%
  • It has set an ambitious goal to achieve net zero in its own operations by 2028. It is the first network operator to get its plan verified by the Science Based Targets Initiative.
  • It will provide a total of £67 million worth of benefits to support customers experiencing fuel poverty and making clear commitments to play its part in delivering the UK’s Levelling up Goals as part of its Social Contract.

Basil Scarsella, UK Power Networks CEO, commented, “The 2020s will be a decade of transformative change in the energy system and in our society, as we decarbonise every aspect of our economy, and a time when net zero becomes real for millions of our customers. It will bring major change to the lifestyles of people and communities; from the way we refuel our vehicles to heating our homes and using energy wisely.

“That is why we have undertaken our most extensive ever consultation and engagement exercise, responding to what more than 26,000 people have told us and creating a business plan with customers and communities at its heart. I would like to invite anyone who would like to feed into our business plan, to view it online or attend one of our planned events to let us know what they think.”UK Power Networks says that its latest business plan places customers and communities at the heart of net zero, but it will need to wait until Ofgem’s official approval in December before it can work towards implementing this business plan. You can read the full plan yourself on UK Power Networks’ website.

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