Britain on fast track to net zero with early access to £4 billion infrastructure investment

Press release
Publication date
Industry sector
Transmission Network
Licence type
Electricity Transmission Licence

British renewable energy projects will be connected quicker thanks to new Ofgem rules granting early access to almost £4 billion of investment for crucial transmission equipment and services. 

The regulator’s new Advanced Procurement Mechanism (APM) will unblock supply chains by allowing Britain’s electricity transmission owners (TOs) to buy essential equipment – such as switchgear, cables and steel – years in advance of when it is needed. 

This streamlined process will ensure green-lit projects are ready to break ground as soon as planning approval is granted, allowing TOs to avoid delays, control costs and attract international investment in the drive to net zero. 

This first-of-its kind mechanism reflects Ofgem's commitment to the government’s Growth Duty compelling regulators to tear down barriers to promote growth and innovation – and the concept could be extended in the future to support other areas of infrastructure development. 

Akshay Kaul, Director General, Infrastructure, for Ofgem said:  

“Building a modern, clean and secure energy system is the key to ending our reliance on international gas markets responsible for volatile prices, so we must do everything we can to clear the way for trailblazing projects to move forward.  

“The Advanced Procurement Mechanism is an innovative model that could be extended in the future to develop other areas of the energy sector, and possibly mirrored by other regulatory bodies supporting the delivery of national infrastructure.  

“It’s a significant step on the accelerator as we drive towards net zero and we are committed to working with government, GB Energy and the National Wealth Fund to maximise the economic opportunities of infrastructure investment. 

“Across the world many countries are stepping up their investment in clean energy at the same time, putting unprecedented pressure on the supply chain as growing demand for essential materials forces up prices and lengthens delivery times.  

“This is why it’s vital that we help the electricity transmission owners move quickly, procuring at scale as early as possible to reduce financial risk – and show the global supply chain that Britain is committed to investing in its energy networks.”  

Energy Minister Michael Shanks said: 

"This fast-track measure means we can quickly get Britain building the infrastructure we need to deliver clean power by 2030 and an energy system that can bring down bills for households and businesses for good 

"Giving developers a head start in the global race to secure essential materials and equipment will help to avoid delays by putting shovels in the ground as soon as clean power projects secure planning permission, and protect billpayers by keeping costs down. 

"This builds on our work to reform our broken planning system to speed up renewable energy projects like wind farms, and to overhaul the grid connections queue to connect clean power projects quicker." 

The APM balances acceleration with accountability to ensure that companies operating within Ofgem’s strict financial framework are delivering projects on time and at the best value to customers. 

Advantages to this first-of-its-kind framework include: 

  • Reduced risk of costly supply chain delays as global demand for vital infrastructure materials increases 
  • Lowering or controlling build costs by purchasing materials in advance, as supply and demand steadily raises prices year on year 
  • Supporting growth in domestic manufacturing and attracting international investment to British projects  
  • Accelerated project delivery which will help government achieve clean power by 2030, and subsequent net zero targets after that  

The introduction of this ‘use it or lose it’ allowance chimes with independent advice provided to government last November by the National Energy System Operator (NESO), which called for a step change across the energy sector to achieve clean power by 2030. 

However, conscious of the significant impact that the transition to net zero has on customer bills, the regulator is clear in its governance rules to ensure that the APM is used only for the intended purposes and any unused funding will be returned to consumers.  

To minimise the risk of stranded procurement – pre-ordered equipment for projects that do not progress – Ofgem will ensure that only equipment that is transferable between many different projects is eligible for APM funding. More bespoke procurement will be considered on a case-by-case basis to assess the benefit and risk.  

Notes to editors 

The APM is among steps to free up Britain’s transmission owners (National Grid, SPEN and SSEN) to accelerate investment both now and via the RIIO-3 price controls framework, which sets investment levels from 2026 TO 2031. 

In symmetry with moves to accelerate the construction of new infrastructure projects, Ofgem has also proposed reforms to the process of connecting new builds to the network via an End To End Review of connections.