The STA respond to Ofgem’s RIIO-ED2 2023 announcement

Ofgem has announced plans to push electricity suppliers to invest more in developing a carbon neutral energy system in the next price control period, in 2023, following pressure from industry and business groups to do more to accelerate decarbonisation of the energy system.

The STA, alongside a number of other organisations, including the Confederation of British Industry (CBI) have criticised the regulator's mandate, which has not changed since 2011, for being completely out of step with the UK's legally binding net zero target. Both bodies have emphasised the need for the Government to confer new statutory powers in order to enable Ofgem to accommodate greater deployment of renewables in the UK.

Onshore renewables such as solar and battery storage will be essential in decarbonising the UK economy, and the Committee on Climate Change estimates that solar must account for at least 40GW of the energy mix by 2030 in order to remain on track to reach net zero greenhouse gas emissions by 2050. The 'Net Zero Technical Report' can be read here.

Ofgem was heavily criticised recently over its Targeted Charging Review, which has resulted in a decision to apply fixed charges to consumers in order to recuperate residual charges in the future, and also to partially reform so-called 'Embedded Benefits' which will see smaller distributed generators lose out. The former will remove part of the incentive for saving energy via efficiency measures or installing onsite renewables, while the latter could entail a potential loss of £2.5 per MWh in additional revenue for small-scale solar photovoltaic generators. Read the STA's response in full here.

Read the article online at: https://www.energyglobal.com/special-reports/03012020/the-sta-respond-to-ofgems-riio-ed2-2023-announcement/