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£22.2 bn To Be Spent Upgrading UK Electricity Network To Make It Greener

December 1, 2022

By Paul Homewood

 

More cost to be incurred for the renewables push:

 

 

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Regulator Ofgem has proposed price controls on Britain’s energy distribution operators and new expectations for them to make the electricity grid greener.

The controls will run from April next year until 2028 and are focused on driving the move away from importing fossil fuels and relying on expensive gas.

Grid capacity will also be boosted in order to pave the way for cheaper greener energy as more products become reliant on electricity.

The businesses include Southern England’s UK Power Networks and SP Energy Networks in southern Scotland, among others.

They will need to invest a total of £22.2bn between 2023 and 2028 to help Britain prepare for a future where more homes and businesses opt for electric cars and heating.

The potential of renewable energy sources such as wind, solar, and wave power require changes in the way energy is used and stored to gain their benefits. The price controls set out by Ofgem will allow for the scale of investment required without adding to customers’ bills, the regulator said.

While the cost of the work is recouped through the network charges on consumer bills, limits on network profits and increased efficiencies, the funds will remain at an average of £100 per year per bill-payer, despite the increased investment.

Akshay Kaul, Ofgem’s interim director, said: “The investment set out today delivers value for consumers, safeguards security of supply and helps ensure Britain is no longer at the mercy of international energy prices or geopolitical events.

“We’ve set the initial amount of investment that local electricity distribution network operators can make in the 2023 to 2028 period, with every pound representing value for money for consumers and no increase in bills.

“The economics of energy have shifted with home-grown cleaner renewables like wind and solar energy proving cheaper than costly imported gas. Together with more nuclear and potentially hydrogen-fuelled power, these renewables will contribute to a lower- carbon energy mix, better protected from geopolitical events and energy price shocks.

He added: “These new low-carbon sources of generation will also need to be connected to an expanded electricity network to meet the growing demand for electricity with millions more electric heat pumps in homes and electric vehicles (EVs) on the road expected over the coming years.

“We’ve carefully considered all the work that will be required and set the budget for the networks, accordingly, driving the increase in capacity needed for net zero as well as delivering more reliable and resilient networks, at no extra cost to consumers.”

https://eandt.theiet.org/content/articles/2022/11/ofgem-promises-major-green-investment-in-electricity-network-without-bill-rises/

Forget the nonsense about customers not having to pay the bill – this is just smoke and mirrors. If networks can make efficiency savings, these should be passed onto energy consumers in reduced bills.

Consequently households will still end up paying for this investment, a total of £22.2 billion over five years.

33 Comments
  1. W Flood permalink
    December 1, 2022 12:02 pm

    What percentage network capacity increase will we get for 22.2 bn? Anybody know?

    • sensescaper permalink
      December 1, 2022 12:05 pm

      Exactly … we don’t know – but based on experience of energy management policy over the last 3-4 decades – we can sure make an educated guess!

  2. December 1, 2022 12:48 pm

    So frittering money away on virtue signalling nonsense is now defined as “investing”.

    And what is this “cheaper” ruinable energy of which they speak?

    Perhaps, extremely improbably, our European chums are giving away what they send down the interconnectors, because our own ruinables certainly aren’t cheap. Perhaps “cheap” in the sense of not directly costing as much as usual, because all the whirligigs and moonbeam catchers have produced the square root of bugger all, so far this week.

    And what are we to say about Offtheirrockersgem?

    Yet another “Watchdog” that is incapable of barking, but assists the bloody wolves! Sack the lot!

    • Nigel Sherratt permalink
      December 1, 2022 1:49 pm

      The curious incident of the watchdog in the night-time, generating electricity from moonbeams. Sunbeams from cucumbers would make more sense.

      • December 1, 2022 10:41 pm

        “Lemuel Gulliver visits the land of Balnibarbi, where people insist on doing everything in an impractical fashion. Those few who wish to use common sense in their activities are forced by social and political pressure to conform to the impractical. The epitome of the attitudes of the people of the land is found in the Grand Academy at the capital city of Lagado. At the academy Gulliver sees all sorts of experimentation going on. The most striking aspect of the projects is their absurdity, the second is that they all require a constant flow of money, like modern research and development projects.”

        “The first projector Gulliver meets at the Grand Academy of Lagado is typical of them all:

        . . . He had been eight years upon a project for extracting sunbeams out of cucumbers, which were to be put in vials hermetically sealed, and let out to warm the air in raw inclement summers. He told me, he did not doubt in eight years more, that he should be able to supply the Governor’s gardens with sunshine at a reasonable rate; but he complained that his stock was low . . . since this had been a very dear season for cucumbers. I made him a small present. . . .”

  3. December 1, 2022 12:56 pm

    While the cost of the work is recouped through the network charges on consumer bills

    How is that ‘no increase in bills’?

    • charles allan permalink
      December 1, 2022 1:22 pm

      Cos someone called alice in electroland says it will be .

    • tamimisledus permalink
      December 1, 2022 2:22 pm

      “Bottle, Ball, Ball, Bottle” Ha-Ha
      With respect to the big man.

    • John Hultquist permalink
      December 1, 2022 5:05 pm

      without adding to customers’ bills

      This is called “The Shell Game” – – find the fee under the shell.

  4. December 1, 2022 12:59 pm

    It’s always an “investment” when you’re wasting taxpayers money without any concern of gettng a return. ™️Gordon Brown

  5. December 1, 2022 1:01 pm

    Insanity is now the norm.
    Pay a lot more for a lot less.
    Its everywhere, not just energy.
    Now ‘net zero’ has morphed from waging war on CO2 to waging war on ‘Putin’.
    Eric wrote a novel, not a blueprint for the future.

  6. Dave Ward permalink
    December 1, 2022 1:15 pm

    “Where more homes and businesses opt for electric cars and heating”

    What they REALLY mean is “Where more homes and businesses are forced to change to electric cars and heating”

    • Nigel Sherratt permalink
      December 1, 2022 1:44 pm

      What they more likely really mean is where fewer homes can afford heating or a car.

  7. Chaswarnertoo permalink
    December 1, 2022 1:49 pm

    Greener: more expensive and less useful…

  8. GeoffB permalink
    December 1, 2022 1:56 pm

    OFGEM have f*cked up everything they have ever got involved in.
    Today the average daily consumption of electricity per household is just under 10kWh per day. (the cap is based on this). The wires in the street from the local substation are sized to handle this, but a second consideration is diversity factor…not everyone is using power at the same time so the load is spread over the day.
    Roll forward to 2032 with 5kW heat pumps on all day in winter (only 15kW of heat) that is a daily usage of 120kWh plus 20kWh to charge the car(s) plus the original 10kWh gives 150kWh….That is 15 times the current electrical energy and everyone has a heat pump. So we need a bigger transformer in the substation and to rewire every home in the country to a 3 phase connection with much heavier cable. That is going to cost a fortune……OR we price electricity like airplane tickets, the so called Demand Side Reduction, the local sub station controls your smart meter price according to demand, If you cannot afford it you freeze. A dystopian future awaits us, but that is what net zero is all about.

    • tamimisledus permalink
      December 1, 2022 2:24 pm

      Stop trying to baffle people with facts!

    • Nigel Sherratt permalink
      December 1, 2022 5:17 pm

      Exactly, no car and very little heat (or soup) for you!

  9. Cheshire Red permalink
    December 1, 2022 2:13 pm

    £22B of Capex without any extra costs on energy bills?

    I thought we’re approaching Christmas, not April Fools day.

  10. December 1, 2022 2:42 pm

    Will ANY of these draconian investments get so much as a hearing in Parliament; or has that institution also copped out of sanity?

    • December 1, 2022 3:21 pm

      That pre-supposes there ever was any sanity in that institution

  11. December 1, 2022 2:42 pm

    Electric ‘Heat Pumps’? They’re kidding us surely? Right?

  12. Malcolm Chapman permalink
    December 1, 2022 3:32 pm

    Yes, it’s quite simple – the hydrogen power drives the turbine that produces the electricity that drives the heatpump which pumps heat into your home. You have to get your electricity from somewhere else. None of this needs any additional infrastructure, many experts predict.

    • charles allan permalink
      December 1, 2022 5:29 pm

      We need electricity to synthesise the hydrogen

  13. MrGrimNasty permalink
    December 1, 2022 4:06 pm

    Coal and wind generation have reached parity several times during the last few days.
    Wind struggling to make more than low single digit % of demand for several days.

  14. December 1, 2022 5:01 pm

    “Akshay Kaul, Ofgem’s interim director, said …

    The economics of energy have shifted with home-grown cleaner renewables like wind and solar energy proving cheaper than costly imported gas.”

    Also OFGEM:

    “Energy Price Guarantee – From 1 October 2022

    Electricity – £0.34 per/kWh, Daily standing charge: £0. 46

    Gas £0.10 per kWh, Daily standing charge: £0. 28”

    https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you

    • December 2, 2022 11:29 am

      Perhaps he/she/it could explain why we are being charged at the rate for gas generation on all our electricity.

  15. John Hultquist permalink
    December 1, 2022 5:16 pm

    ” £22.2bn ”
    In the USA, projects like this always end up costing 2x or 3x the estimate made in the planning stage {Boston’s Big Dig}, or they are never completed
    {California bullet train}.
    But you won’t notice this on your monthly bill. Promise.

  16. catweazle666 permalink
    December 1, 2022 6:19 pm

    Really…
    I seriously doubt I’ve ever read a bigger collection of mendacious utter claptrap in my life!

    • AC Osborn permalink
      December 2, 2022 9:37 am

      I absolutley agree.

  17. It doesn't add up... permalink
    December 1, 2022 9:39 pm

    Always worth revisiting this estimate of the costs of recabling for net zero:

    Click to access Travers-Net-Zero-Distribution-Grid-Replacement.pdf

    £466bn in total, including household rewiring etc.

    • Mikehig permalink
      December 5, 2022 11:23 pm

      That’s a good report, making many strong points which have been overlooked in all the grand plans for our energy future.
      However its case is weakened by some of the early segments on household loads, etc. It simply adds up all the major loads in a house with no regard for when they are likely to arise. A few minutes’ research shows that virtually all EVs are charged overnight at times which are unlikely to clash with prople using power-showers, doing the cooking etc.
      It uses peak loads on start-up with no mention of the technology which exists to mitigate this, called “soft-starting”, aiui.
      Similarly, technology is already in use in car chargers which adapts the load according to the overall draw on the house system.
      Unfortunately these rather obvious miscontructions could mean that the fundamental problems described later do not get the attention that they deserve.

  18. December 2, 2022 11:33 am

    The problem is that nobody is challenging this sort of bollocks when it is published. I used to be a member of the IET but left as it went greenie and Engineering & Technology became like a Guardian supplement with nothing worth reading. So nobody at E&T would challenge these lies and that is true across the rest of a media that hasn’t been able to work out that the real name of a certain traumatised Buckingham Palace visitor is Marlene Headley.

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