Winser warns UK could lose out in global supply chain race

The electricity networks commissioner has told Utility Week he has “real concerns” about the flexibility of supply chains to keep up with the pace of the energy transition.

Nick Winser said there was an urgent need for networks to establish long-term relationships with key suppliers but this was currently hampered by a lack of system planning and an outdated regulatory regime.

He reiterated his calls for a move to system-level regulatory approval for new transmission infrastructure, saying networks are currently “wearing out Ofgem’s door” by seeking permission to proceed on a project-by-project basis.

He also called on transmission operators to start ordering batches of key equipment now to ensure bottle-necks do not appear.

Asked how worried he was that the UK could lose out in the race for key materials, he said: “It’s a real concern. We have at the moment a system where long-term relationships with supply chain are difficult to form. That would be ok if the supply chain was one that was going to be very quick to flex as markets pick up in particular areas. But if you look at critical areas like high voltage cables, this is highly specialised equipment.”

He cited waiting times of up to four years for grid transformers as an illustration of the problem, saying: “If we’re trying to build in seven years, you’re running into headwinds pretty quickly. We need to be ordering equipment ahead and then deciding where to deploy it.”

He added: “I’d like to see transmission operators ordering batches of key equipment like power transformers now, knowing that they will be needed somewhere on the system.”

Winser was speaking ahead of his appearance at Utility Week Forum next month and on the back of his recent report to government. A full interview will feature in the latest Utility Week digital edition, available exclusively to members from Thursday (7 September).

The report made a series of recommendations aimed at halving the time it takes to build new electricity transmission infrastructure from the current 12 to 14 years. It called for a spatial plan to identify where new electricity infrastructure will be needed, as well as a set of design principles. He also backed payments for residents living near new overhead power lines and a wider information campaign on the role of a bolstered transmission system in enabling net zero.

The report made clear that the current regulatory regime adds “uncertainty and significant time” to the process.

Winser, who was influential in the design of the RIIO price control during his time leading National Grid, told Utility Week a “big step” in regulation is needed. He cited Ofgem’s adoption of the accelerated strategic transmission (ASTI) framework as a step in the right direction.

He added: “It’s a move from asset by asset regulatory approval to looking at groups of assets. I’m suggesting the next step is system level regulatory approval.

“We’ve moved to a place where utilities are wearing out the door to Ofgem by going in an awful lot on individual projects. We need to change the process so that that Ofgem is standing earlier in the process and looking at the system wide configuration.”

He said as part of his vision of the new stage of network regulation “the money can be sorted out later”.

He added: “The arguments over the money have the potential to delay build and in delaying build a load more money is being spent by having congestion and not having the low-carbon power that is economic and removes emissions.”

To read the full interview with Nick Winser, in which he discusses reform of the planning system, community engagement and the trade-offs between cost and disruption for the public, see the latest Utility Week digital edition on Thursday.

To hear his thoughts at Utility Week Forum secure your place here