Briefings

Electricity distribution network regulation

Time for a new approach

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We are entering a new paradigm. Delivering net-zero emissions by 2050 will require the energy system to transform over the next decade and the UK government has outlined plans for a ‘new deal’ to accelerate investment in infrastructure to drive economic recovery from the COVID-19 pandemic.

The upcoming regulatory price control review for distribution network operators (DNOs) must ensure the electricity network is upgraded in line with these priorities. This cannot be achieved through minor tweaks to the same basic ‘RIIO’ approach used for previous price control reviews. Instead, four major changes are required:

  • Pathway choice: The key outcomes should be determined by an independent science-based analysis of the pathway to net zero. This should involve a balance of expertise across energy sectors and along the value chain.
  • System architecture: These outcomes should be converted into a local plan of infrastructure deliverables covering the whole energy system. This would ideally be undertaken by an independent distribution system operator (DSO) with broad expertise, including delivering upgrades in the built infrastructure. It would need to work in close collaboration with local authorities and other local and regional actors driving the energy transition. It would also be able to fast-track the process of upgrading system operational capability.
  • Aligned delivery mechanisms: Delivery mechanisms across the energy system, including the DNO price control, should be aligned to ensure coherence of the infrastructure upgrades.
  • Learning and adaptation: There must be flexibility to adapt and adjust plans throughout the price control period and apply learning from progress with new technological developments and deployment experience.

Read the full briefing, Electricity distribution network regulation: time for a new approach, here.

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