Energy industry regulator Ofgem has set out a 9-point plan to prioritise tackling the climate crisis. The plan supports investment in low-carbon technology, prevents exploitative price rises and encourages more flexibility in energy systems and regulation.
The plan has been devised after Ofgem were criticised for failing to prioritise the climate crisis issues. The changes proposed by the plan will change how energy is governed and help the Government achieve its net-zero targets.
Benefits of the 9-Point Plan
Part of the plan involves getting 10 million electric vehicles on UK roads by 2030. There will also be a significant increase in offshore wind generation. Households will also gain further protection from rising energy bills.
Despite great progress being made towards decarbonising the economy, Ofgem insist significant challenges remain to meet the Government’s 2050 goals.
Ofgem said in a statement: “The way we heat our homes and our transport needs to transform. Only 5% of the energy used to heat our homes today is from low carbon sources and our use of electric vehicles may need to grow from 230,000 today to 39 million by 2050. To meet the challenge of net zero, we must now go further and faster, especially in decarbonising transport, heating and our industrial use of energy.”
The Decarbonisation Action Plan includes:
Flexible Price Controls
Ofgem intend to ‘build adaptability’ into their price controls. This will help network companies invest efficiently and be able to adapt to changes in technology and infrastructure.
Investment in Innovations
A regulatory fund will be set up to enable investment in innovative solutions aimed towards combating climate change.
Offshore Grid Expansion
Alongside government and industry, Ofgem will explore opportunities for better coordination between all entities to encourage rapid expansion of an offshore grid at as low a cost as possible.
Cost-Effective Decarbonisation of Heating
The regulator says it will harness existing knowledge and expertise to help government and the industry to develop cost-effective and low risk options to decarbonise heating.
Energy Systems Review
A review of how the country’s energy systems are managed will determine if they are fit for a net-zero future.
Low Cost Transitions
Ofgem want a more flexible electricity system that will benefit consumers by ensuring they only incur the lowest costs when transitioning to a reliable net-zero system.
EV Regulatory Strategy
A regulatory strategy on electric vehicles will help support their roll out while maximising the benefits to consumers.
Retail Market Experimentation
Innovation and experimentation in the retail market will be supported by the industry watchdog, helping create low carbon products and services that directly benefit consumers.
Versatile Regulatory Approach
Ofgem say they will respond to the need to take big decisions in the face of what they describe as a ‘deeply uncertain future’ by becoming more adaptable in the way they work with regard to regulating the energy industry.
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