UK Energy Watchdog Sets Out New Framework for Onshore Transmission Regulation, Funding

By Joe Hoppe

U.K. energy-markets regulator Ofgem said Thursday that it has published its Accelerated Strategic Transmission Investment, or ASTI framework, streamlining the onshore transmission regulatory approval and funding process.

The regulator said it has introduced the new framework in response to the U.K. government's Energy Security Strategy, accelerating the transition away from fossil fuels and setting out targets to promote energy security, including connection of up to 50 gigawatts of offshore wind capacity by 2030. However, the existing onshore transmission network can't support this substantial growth, Ofgem said.

Ofgem said it will reduce the number of regulatory assessment stages and allow transmission owners earlier access to project funding to accelerate the completion of ASTI projects. It has also decided to exempt from competition those projects that transmission operators' delivery plans consider are feasible to be completed by 2030.

"Today's publication of the ASTI Framework is a critical milestone to support our collective net zero and energy security ambitions and we welcome Ofgem's approval of the need for the investments required to deliver 2030 offshore wind targets," said Rob McDonald, managing director of SSE PLC's transmission unit.

The news was also welcomed by National Grid PLC's Electricity Transmission division as the next step to a more affordable, resilient and clean energy system, though it also said reform is still required across a number of areas, including the planning system and the setting of allowances.

To ensure consumers benefit, the regulator said it has introduced an incentive that rewards transmission operators for early delivery, and penalizes them for the reverse.

"Our updated analysis suggests that, if all ASTI projects are delivered by their optimal delivery dates, we expect consumers will see a net benefit of up to 2.1 billion pounds ($2.61 billion) in terms of reduced constraint costs and carbon savings," Ofgem said.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

December 15, 2022 03:04 ET (08:04 GMT)

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