A senior Ofgem director has conceded that the regulator’s new net zero duty will “strengthen” its efforts to decarbonise the energy network.
That is despite Ofgem chief executive Jonathan Brearley previously signalling that the net zero duty was not necessary.
Ofgem director-general of infrastructure Akshay Kaul said the regulator welcomed the new duty while giving evidence to the House of Commons environment audit committee’s inquiry into sustainable electrification.
When the government was under pressure earlier this year to give the regulator a statutory remit to help meet the 2050 decarbonisation goal, energy minister Lord Callanan said he had been assured by the Ofgem chief executive that it was “not necessary” because the organisation already viewed the net zero transition as a “fundamental” part of its work.
However, Ofgem director-general of infrastructure Akshay Kaul said the regulator welcomed the new duty.
The new duty makes it very explicit that Ofgem must have “close regard” to meeting the five yearly carbon budgets, which are designed to ratchet up progress to the 2050 decarbonisation goal, he said: “That clarity is very welcome and will strengthen our hands as a regulator when we take a lot of actions to speed up progress of the system towards those net zero targets and make the trade-offs that need to be made.
“We’d already started to change the foundations of the energy system from one regulated in an incremental project by project way to a system that is spatially planned and much more anticipatory.
“To the extent that there are obstacles and challenges to the various initiatives that arise in taking action, the net zero duty gives a very clear mandate to the regulator that you are required to do this by law.”
But the regulator doesn’t require any additional powers to speed up grid connections, Kaul said: “We don’t need any new powers, the Energy Act sets up institutional arrangements to plan the system in the long term.”
He also told the committee that while Ofgem had “doubled” in size over the last five to six years, given the range of new roles it was being expected to take on, growth will need to continue.
Claire Dykta, head of markets for the National Grid’s Electricity System Operator, told the committee that the new Future System Operator will need to nearly double in size over the next 12 months following its recent ratification in the Energy Act.
“We are well on way to 1,000 now and will be 1,800 by the end of next year. We’re well on way to recruiting and building that capacity.”
She also said that “longer term reforms” of grid connection hold ups are due to be published by the end of November.