By David Smith, Chief Executive, ENA
Our efforts to tackle climate change are the defining issue of our time. And tackling the global climate emergency is first and foremost an energy challenge.
To meet this challenge as quickly as possible, and to meet our Net Zero target, our country needs access to world leading, innovative energy network infrastructure. That is important not just to ensure that we have a grid that can connect greater levels of renewable energy; it is also important to ensure that we have the infrastructure we need to cut our carbon emissions in other areas, such as heating and transportation.
Given the size and scale of this challenge, there is a need to look to new and perhaps radical ideas to tackle it. But as recently published research by Frontier Economics clearly demonstrates, state ownership of our energy network infrastructure should not be one of those ideas.
Frontier’s findings show that re-nationalising Britain’s grid infrastructure risks delaying efforts to meet our Net Zero target just at the point when time is critical. It will likely increase the costs of decarbonisation to the public when we need to keep those costs as low as possible. It will severely disrupt innovation when we need to be as creative as possible in finding solutions to the very real problems we all face.
What’s more, the research makes it clear that far from improving the governance of our energy infrastructure, state ownership will lead to greater conflicts of interest between institutions at the point they need to be working together as closely as possible. It will result in reduced checks and balances at the point when we need to spend more of our country’s money on decarbonisation. And it will lead to a general lack scrutiny at the point when public concern with the issues we are dealing with is arguably greater than it has been before. Far from democratising our system, state ownership will sweep away the three tiers of democratic accountability and transparency we currently have in Ofgem, the Government and Parliament.
So what approach should we take instead?
First, let’s not forget the huge progress we’ve made in this country to reduce our carbon emissions to levels not seen since 1888. Private investment has helped make Britain a superpower of renewable energy, with a third of Britain’s electricity now generated from renewable sources connected to its energy networks. Rather than disrupting that progress, let’s find a way to build on it to reach Net Zero.
Second, we should recognise that private investment, and the way it is managed, will help our energy infrastructure to reach our Net Zero target as quickly and as efficiently as possible. The Committee on Climate Change believes we will need to spend between 1-2% of the UK’s total wealth each year to reach Net Zero by 2050. Having invested nearly £4,000 in grid infrastructure for every household since privatisation in 1990 in a way that has helped deliver the world-class system we have today, Britain’s energy network companies have proven their ability to successfully manage risk and deliver innovation to drive up performance and drive down costs.
Third, we need to ensure that no person is left behind by decarbonisation. Britain’s network companies may be private but they have great track record of delivering a vital public service, demolishing the myth that those two things are mutually exclusive. They are considered to be some of the best in the world in terms of their performance for the public – not just in terms functional performance but in fulfilling their social obligations, such as those they have to more than 6 million vulnerable customers on Priority Service Registers.
Fourth, and finally, we need an approach based on the idea that the decarbonised energy future is as much local as it is national. Our cities, towns and communities need to be on the front-line of fighting climate change, and to deliver deeper levels of decarbonisation we will need to make our local energy grids more capable to connect more renewable energy and fully utilise local smart energy markets, work that is already underway through ENA’s Open Networks Project.
The decisions we make now about the way our energy system is run to reach Net Zero will have an impact that stretches far beyond the lifetimes of those of us reading the pages of this magazine today. What is clear from Frontier Economics’ research is that state ownership would not only be costly and unnecessary in the long run; it would also hinder and undermine our ability to make those decisions in the first place.
With time so critical, and the stakes so high, let’s not throw away the progress we’ve made so far. Let’s look to a future that is built on the strengths of private investment and all the benefits it can deliver.
For further information, please visit the Securing a Greener Future website at: https://securingagreenfuture.uk/
Notes to Editors
For further information, please contact:
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About Securing a Green Future
The aim of the campaign is to raise awareness of the role energy network companies have to play in tackling the climate emergency by providing the infrastructure needed to decarbonise our economy. Find out more at:
Fast facts about the role Britain’s energy networks are playing to decarbonise our economy:
- A third of Britain’s electricity is now generated from renewable sources that have been connected to energy networks, helping reduce UK carbon emissions to their lowest level since 1888 (BEIS, CCC)
- Britain’s local electricity grids have connected the equivalent of ten Hinkley Point C power plants in the last ten years – over 30GW in total (BEIS)
- Nearly 100 green gas production plants are now connected across the country (ABDA) – green gas could be used to heat up to 15m homes by 2050 (Cadent)
- The UK economy will need to spend between 1-2% of its total wealth each year to reach Net Zero by 2050 (CCC)
- Great Britain could save up to £40bn by 2050 by creating a more innovative, flexible energy system (Imperial College)
- Nearly £4,000 has been invested for every household in GB grid infrastructure in the country since privatisation in 1990 – £100bn in total (Ofgem)
- Another £1,600 is being invested for every household right now, under the current price control (2013-2023) – £45bn in total (Ofgem)
- Private investment helps bring down bills – electricity network costs have fallen by almost a fifth since privatisation whilst £100bn has been invested (Ofgem)
About Energy Networks Association (ENA)
- Energy Networks Association represents the companies that are responsible for operating the ‘wires and pipes’ of Britain’s gas and electricity network infrastructure, serving over 30 million customers across the country.