Industry

24 MAY 2021

NIC WELCOMES £300M OFGEM INVESTMENT TO REWIRE BRITAIN

The National Infrastructure Commission has welcomed Ofgem’s plans for an initial £300m investment to get Britain ready for more electric transport and heat, but has also called on the UK government to publish a roadmap for wider EV charging infrastructure this year.

Ofgem have claimed their new £300m plans – the first of a projected £40bn spend over the next seven years - will help to power the electric vehicle revolution, with motorway service areas and key trunk road locations across the country set to get the cabling they need to install 1,800 new ultra-rapid charge points, tripling the current network. 

Under the plans, a further 1,750 charge points will be supported in towns and cities. As drivers make the switch from petrol and diesel to electric, Britain’s cables, substations and other infrastructure need a massive upgrade to support this new demand for electricity. 

The investment will be delivered in the next two years and Ofgem say the latest investment is part of a much bigger plan to ensure Britain has the energy infrastructure it needs to support the move to low carbon transport and heating while maintaining secure supplies. The magnitude of this investment is expected to be in the order of over £40bn through Ofgem’s regulation of energy networks.

Ofgem says that every region in Britain will benefit from the investment, with 204 net zero projects worth £300.5m across England, Scotland and Wales. These “shovel-ready, low carbon projects” start this year, supporting clean transport and heat, and opening up local electricity grids to take on more low carbon generation. 

While electric car ownership is on the rise, Ofgem research has found that 36% of households that do not intend to get an electric vehicle are put off making the switch over a lack of charging points near their home. An extensive motorway charging network and more charging points in cities and train stations will help address this ‘range anxiety’, so Ofgem is accelerating investment to boost charge point installation. 

Cities like Glasgow, Kirkwall, Warrington, Llandudno, York and Truro will benefit from increased network capacity to support more ultra-rapid charge points, increased renewable electricity generation and the move to more electric heating for homes and businesses. Investment also covers more rural areas with charging points for commuters at train stations in north and mid-Wales and the electrification of the Windermere ferry.  

Jonathan Brearley, chief executive of Ofgem said: “This £300m down payment is just the start of building back a greener energy network which will see well over £40bn of investment in Britain’s energy networks in the next seven years. The payment will support the rapid take up of electric vehicles which will be vital if Britain is to hit its climate change targets. Drivers need to be confident that they can charge their car quickly when they need to. We’re paving the way for the installation of 1,800 ultra-rapid charge points, tripling the number of these public charge points. Drivers will have more charging options for longer journeys.

“In the year that Glasgow hosts the COP26 climate summit, the energy networks are rising to the challenge and working with us and partners to accelerate projects that can start now, benefiting consumers, boosting the economy and creating jobs.”

Rachel Maclean, transport minister said: “I warmly welcome today’s news from Ofgem, which will greatly improve the resilience of our charging network as we build back greener. With more than 500,000 electric cars now on UK roads, this will help to increase this number even further as drivers continue to make the switch to cleaner, greener vehicles.” 

David Smith, chief executive at ENA which represents the UK and Ireland’s energy networks businesses said: “With just a few months left until COP26 we are delighted to have been able to bring forward such a crucial enabler of the prime minister’s green recovery ambitions. Delivering a green recovery for seas, skies and streets, over £300m of electricity distribution network investment will enable wide-ranging projects which help tackle some of our biggest Net Zero challenges, like electric vehicle range anxiety and the decarbonisation of heavier transport. This new funding shows the social, economic and environmental benefits that can be brought forward by industry working closely with a flexible regulator.”

Keith Bell, member of the Climate Change Committee, said: “This joint initiative by Ofgem and the electricity distribution network companies is a welcome development, showing flexibility in the regulatory arrangements in the long-term interests of energy users. On the journey to Net Zero, we need to make it as easy as possible for people to manage without their combustion engine cars. Electric vehicles are looking more and more attractive, but we need to make sure they can be charged easily, and that means having the right infrastructure – charge points and network capacity – in the right place at the right time.

“As well as enabling charging of electric vehicles and the electrification of heat, network investment will provide support for supply chains and, where projects require expansion of the workforce, the creation of new jobs. It will be an essential complement to a smarter power system where innovative information technology and attractive energy tariffs for consumers will ensure we make best use of our electricity system infrastructure.”

A National Infrastructure Commission spokesperson said: “The investment in the electricity grid announced today by Ofgem – including supporting 1800 ultrarapid chargepoints on A -roads and motorways – is a welcome boost and supports the delivery of Commission recommendations. It helps send a green light to drivers to encourage them to make the switch to electric vehicles. Government should also publish a roadmap for wider EV charging infrastructure this year, as we recommended in our annual monitoring report, to generate greater momentum towards decarbonising our roads that will help ensure the UK reaches its net zero goals.”

The announcement is the outcome of February’s call for evidence from Ofgem, the Energy Networks Association and each of the Distribution Network Operators.

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