Government should update Ofgem's remit to incorporate the Government's net zero target as set out in the 2008 Climate Change Act. |
198. Enabling businesses to make the best long-term investments requires the right regulatory framework. We risk failing to deliver the investments needed on time unless the regulatory and policy framework is updated. Connecting the necessary low carbon power to the system to achieve our energy goals requires regulation change within the planning and energy regulatory systems, including reforming the remit and decision-making criteria of Ofgem.
199. The Review recommends that Ofgem's remit is updated to incorporate the Government's net zero target as set out in the 2008 Climate Change Act. Whilst doing this, the Government should consider whether this change could provide Ofgem with further opportunities to change its working practices to put even greater emphasis on investments and planning needed for the transition to low carbon electricity. This would support the BESS commitment to ensure that Ofgem "expedites its approvals process to build networks in anticipation of major new sources of generation and demand."169
200. The UK planning regime needs to reflect the importance of energy networks expansion. Stakeholders across the industry have highlighted planning as a key barrier for investments in renewable energy and energy networks. For the UK to build the network capacity needed for 2030, the timeframe to receive planning consent across both renewables and network expansion needs to be reduced significantly.
201. The National Policy Statements (NPS) for Energy sets out the Government's policy for the delivery of energy infrastructure. In the BESS the Government committed to update these to recognise the strategic infrastructure needed as set out by the HND. This should reduce ambiguity, providing a clear direction on decision-making, including the role and expectations of stakeholders involved in the planning process. This would increase certainty for developers, speeding up delivery of renewable energy and energy networks expansions, vital to achieving the Government's renewables commitment.
202. Additionally, achieving a smoother planning process requires central government to work closely with local authorities which will be addressed further in Pillar 4. Some stakeholders highlighted the need for locational pricing in order to ensure that local communities can benefit from the development of infrastructure in their area. This ties into wider needs for improving flexibility of the energy system (see below).
203. Government should act swiftly to implement the BESS, including updating the National Planning Statement to recognise critical infrastructure identified by the Holistic Network Design. This would enable a smoother process for renewable energy projects and energy infrastructure projects. This is needed to deliver the Government's ambition to decarbonise the UK's power system by 2035.