Ofgem delivers £300 million down payment to rewire Britain
Press release
- Publication date
- Industry sector
- Distribution Network
- Transmission Network
- £300 million investment for over 200 low carbon projects to get Britain ready for more electric transport and heat.
- New infrastructure to support 1,800 new ultra-rapid charging points at motorway service areas.
- Part of a broader investment programme for safe, secure and clean energy, with £40 billion confirmed already and more to follow in 2022.
Ofgem is today powering the electric vehicle revolution, with motorway service areas and key trunk road locations across the country set to get the cabling they need to install 1,800 new ultra-rapid charge points, tripling the current network.
A further 1,750 charge points will be supported in towns and cities. As drivers make the switch from petrol and diesel to electric, Britain’s cables, substations and other infrastructure need a massive upgrade to support this new demand for electricity.
The investment will be delivered in the next two years and is part of a much bigger plan to ensure Britain has the energy infrastructure it needs to support the move to low carbon transport and heating while maintaining secure supplies. The magnitude of this investment is expected to be in the order of over £40 billion through Ofgem’s regulation of energy networks.
Every region in Britain will benefit from today’s announcement, with 204 net zero projects worth £300.5 million across England, Scotland and Wales. These shovel-ready, low carbon projects start this year, supporting clean transport and heat, and opening up local electricity grids to take on more low carbon generation.
While electric car ownership is on the rise, Ofgem research has found that 36% of households that do not intend to get an electric vehicle are put off making the switch over a lack of charging points near their home. An extensive motorway charging network and more charging points in cities and train stations will help address this ‘range anxiety’, so Ofgem is accelerating investment to boost charge point installation.
Cities like Glasgow, Kirkwall, Warrington, Llandudno, York and Truro will benefit from increased network capacity to support more ultra-rapid charge points, increased renewable electricity generation and the move to more electric heating for homes and businesses. Investment also covers more rural areas with charging points for commuters at train stations in North and Mid Wales and the electrification of the Windermere ferry.
Jonathan Brearley, chief executive of Ofgem said:
“This £300 million down payment is just the start of building back a greener energy network which will see well over £40 billion of investment in Britain’s energy networks in the next seven years.
“The payment will support the rapid take up of electric vehicles which will be vital if Britain is to hit its climate change targets. Drivers need to be confident that they can charge their car quickly when they need to. We’re paving the way for the installation of 1,800 ultra-rapid charge points, tripling the number of these public charge points. Drivers will have more charging options for longer journeys.
“In the year that Glasgow hosts the COP26 climate summit, the energy networks are rising to the challenge and working with us and partners to accelerate projects that can start now, benefiting consumers, boosting the economy and creating jobs.”
Rachel Maclean, Transport Minister said:
“I warmly welcome today’s news from Ofgem, which will greatly improve the resilience of our charging network as we build back greener.
“With more than 500,000 electric cars now on UK roads, this will help to increase this number even further as drivers continue to make the switch to cleaner, greener vehicles.”
David Smith, chief executive at ENA which represents the UK and Ireland’s energy networks businesses said:
“With just a few months left until COP26 we are delighted to have been able to bring forward such a crucial enabler of the Prime Minister’s green recovery ambitions. Delivering a green recovery for seas, skies and streets, over £300m of electricity distribution network investment will enable wide-ranging projects which help tackle some of our biggest Net Zero challenges, like electric vehicle range anxiety and the decarbonisation of heavier transport.
“This new funding shows the social, economic and environmental benefits that can be brought forward by industry working closely with a flexible regulator.”
Keith Bell, Member of the Climate Change Committee, said:
“This joint initiative by Ofgem and the electricity distribution network companies is a welcome development, showing flexibility in the regulatory arrangements in the long-term interests of energy users. On the journey to Net Zero, we need to make it as easy as possible for people to manage without their combustion engine cars. Electric vehicles are looking more and more attractive, but we need to make sure they can be charged easily, and that means having the right infrastructure – charge points and network capacity – in the right place at the right time.
“As well as enabling charging of electric vehicles and the electrification of heat, network investment will provide support for supply chains and, where projects require expansion of the workforce, the creation of new jobs. It will be an essential complement to a smarter power system where innovative information technology and attractive energy tariffs for consumers will ensure we make best use of our electricity system infrastructure.”
Ofgem, the Energy Networks Association and each of the Distribution Network Operators (DNOs) launched a call for evidence in February for energy networks to come forward with projects that could help Britain reach net zero emissions faster and support the economy as the country comes out of the pandemic.
Last year, Ofgem announced its greenest ever price control with billions invested into network companies and the system operator from April this year. The regulator has also indicated that it will allow billions more investment and better use of flexible technologies and innovations for the local electricity networks from 2023.
Notes for editors
1. This phase of Ofgem’s Green Recovery programme is focussed on the local electricity grids within the current price control. Ofgem is working with the transmission and gas distribution companies to develop further opportunities within their recently confirmed funding settlements.
2. More information about the projects being announced today can be found in our decision document. RIIO-ED1 Green Recovery Scheme
3. Today’s announcement is the outcome of February’s call for evidence from Ofgem, the Energy Networks Association and each of the Distribution Network Operators. Energy networks set to power up the Green Recovery – Energy Networks Association (ENA)
4. Ofgem announced a £40 billion investment programme in December. Ofgem gives go-ahead to a £40 billion+ investment programme for a stronger, greener and fairer GB energy system | Ofgem
5. There will be further investment from 2023 in Ofgem’s Electricity Distribution price control. Ofgem boosts investment for Britain’s electricity networks | Ofgem
6. Local electricity grids are run by Distribution Network Operators. DNOs across Britain are responsible for carrying electricity from the high voltage transmission grid to industrial, commercial, and domestic users. The 14 DNOs in Britain are each responsible for a regional distribution services area, and are owned by six different groups. These groups include:
- Electricity North West Limited (ENWL);
- Northern Powergrid (NPg);
- Scottish and Southern Energy Networks (SSEN);
- SP Energy Networks (SPEN);
- UK Power Networks (UKPN); and
- Western Power Distribution (WPD).
7. There are currently 918 ultra-rapid charge points in the UK. How many charge points are there in the UK 2021 (zap-map.com)
8. 39 motorway service areas will benefit from today’s announcement
9. On Friday Ofgem published research that include barriers to consumers buying electric vehicles One in four consumers plan to buy an electric car in next five years according to Ofgem research | Ofgem
10. The UK Government’s target is to have at least 6 high powered, open access charge points at motorway service areas in England, with more for larger sites Government vision for the rapid chargepoint network in England - GOV.UK (www.gov.uk)
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