Reaching net zero will require substantial reform of regulatory model

If the UK is to hit its net zero emissions target, the public and private sector must work together to deliver the energy infrastructure required, according to Regen and SP Energy Networks.

On 12 November, the pair launched a paper, Energy Networks for the Future, which sought to examine whether the current regulatory model for electricity networks was still fit for purpose to lead the energy transformation and deliver the scale of investment required to hit the 2050 net zero target. It concluded that “significant reform” was required if this was to happen and proposed a new model for energy governance to help networks meet those targets.

The report called for net zero to placed at the heart of energy policy, recommending a new national energy agency or office of net zero is established to coordinate and drive net zero delivery across government departments. Other recommended reforms included networks being required to include a range of net zero carbon options in their business plans that can be quickly enacted to meet changing requirements; the embedding of decarbonisation objectives and outputs in the regulatory model; and ensuring that network companies fulfil their role in achieving a just transition to a low carbon society.

Elsewhere, it proposed enabling a local energy revolution through allowing networks to work more effectively with local bodies. This would support further devolution and democratisation of energy, aiding local regions in meeting ambitious carbon targets. It also called for the enabling of networks in building smarter, optimised and secure energy solutions; new Regional Energy Governance Bodies to provide formal representation for regions to influence network priorities and investment; and maintaining cost efficiencies by ensuring investment mechanisms are properly incentivised to deliver affordable energy, great service and customer value.

Regen pointed out that the paper presented a “sketch of a potential future model” and it was with the intention of encouraging further discussion. It is inviting feedback and is set to debate the contents of it at its annual conference, Renewable Futures on 27 November, and future events moving forwards.

Director of Regen and co-author of the report, Johnny Gowdy, explained that renewed political interest in who owns the electricity networks, along with their governance, regulation and how they are incentivised to make the right investments for the future, had highlighted the “critical role” they have to play in the decarbonisation journey.

Gowdy said: “. Ultimately however, the question of ownership may be less important than the ability of the public and private sectors to work together in a new partnership to deliver decarbonisation at least cost, and a whole new set of social and economic priorities, from energy justice and the protection of vulnerable customers, to the creation of jobs, skills and innovation in the new low carbon economy.”

Regen