The UK economy will need to spend between 1-2 percent of its total wealth each year to reach Net Zero by 2050. This means significant long-term, stable and sustained investment from our economy – wherever that money might come from.
However, when it comes to scrutinising proposals for state ownership of the energy networks, it’s worth considering just how efficient they will be for delivering that investment. After all, whether that investment is funded through our taxes under a model of state ownership or through our energy bills under a privatised model, the cost will ultimately be borne by all of us.
With that in mind, Energy Networks Association (ENA) recently commissioned industry leading energy consultancy Frontier Economics to examine how efficient the proposals set out in the Labour Party’s Bringing Energy Home plans could be compared to the current system and when taking into account the proposed grid infrastructure management proposals.
Rather than just providing a straightforward national analysis, ENA asked Frontier Economics to examine the impact of the proposals on energy bills in each region of the country.
The research – which follows on from Frontier Economics’ recent examination of the wider impacts of the Bringing Energy Home proposals on efforts to reach Net Zero – found that households in North East England could be worst hit with an expected bill increase of £58 with Yorkshire facing a £46 increase and North Scotland expected to see a £43 increase. The south of the Britain would be the least impacted on, with both London and the South East of England potentially facing £19 increases.
The research argues that these costs would be incurred because of the plans outlined in the Bringing Energy Home paper which will make the management of Britain’s grid structure more fragmented and therefore less efficient. This then means these inefficiencies must be subsidised either by bill payers, tax payers or both to reach the current level of operational performance.
The UK is already widely acknowledged as having one of the smartest and most innovative energy networks thanks to over £100bn of investment that has been delivered since the system was privatised in the early 1990s. This private investment has helped Britain to generate more than a third of its electricity from renewable sources, reduce its carbon emissions to their lowest level since 1888 and benefit from nearly 100 green gas production plants which can heat up to 15m homes by 2050. In the current price control period, energy network companies are responsible for delivering an additional £45bn of investment to ensure successes like this continue.
This investment has also helped to lower consumer bills and make energy more accessible and affordable for everyone. The average cost of delivering energy is just 67p each day – less than the amount the average Briton spends each day on coffee. Furthermore, since privatisation almost 30 years ago electricity network costs have fallen by almost a fifth while there have been 59 percent fewer power cuts with their length reduced by 84 percent.
The independent research was commissioned by Energy Networks Association, with Frontier Economics chosen due to its expertise in working with both privately and publicly owned network companies around the world.
|Statistical/DNO region||Selected urban area within region||Minimum increase (%)||Maximum increase (%)||Minimum bill increase||Maximum bill increase|
|North West England / Electricity North West||Manchester||5.5%||15.6%||£8||£23|
|North East England / Northern Powergrid Northern||Tyneside||8.8%||23.1%||£22||£58|
|Yorkshire / Northern Powergrid Yorkshire||Leeds||6.6%||18.0%||£17||£46|
|East Midlands / WPD East Midlands||Leicester||3.6%||11.1%||£5||£14|
|West Midlands / WPD West Midlands||Birmingham||7.7%||20.5%||£14||£36|
|South Wales / WPD South Wales||Cardiff||8.0%||21.1%||£13||£35|
|South West England / WPD South West||Bristol||6.3%||17.5%||£12||£33|
|London / UKPN London Power Networks||Kensington||4.0%||11.9%||£6||£19|
|South East England / UKPN South Eastern Power Networks||Brighton||3.4%||10.4%||£6||£19|
|East England / UKPN Eastern Power Networks||Norwich||3.2%||10.0%||£6||£18|
|South Scotland / SP Distribution||Edinburgh||6.0%||16.7%||£10||£27|
|North Wales, Merseyside and Cheshire / SP Manweb||Liverpool||6.3%||17.5%||£7||£21|
|North Scotland / SSE Scottish Hydro||Inverness||6.2%||17.1%||£16||£43|
|Southern England / SSE Southern||Portsmouth||2.2%||7.2%||£3||£10|
|Average total cost increase across all regions||5.1%||14.7%||£9||£25|
For further information, please visit the Securing a Greener Future website at: https://securingagreenfuture.uk/
Notes to Editors
For further information, please contact:
- 07725 372758
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