Ofgem said it would regulate to ensure network companies invest to deliver affordable, clean energy, and would become more adaptive in its approach to regulation. It announced that it would set up a fund to “unlock investment in innovative solutions to tackle climate change”.
The regulator will explore options to support the development of an offshore grid to enable a four-fold increase in offshore wind generation by 2030.
It said it would review the way the energy system is managed to make sure it is fit for a net-zero future, and “kick start innovation” by suppliers to create low-carbon products and services for customers.
Ofgem wants to encourage more options in the way people use electricity, such as by charging electric vehicles at night and selling the stored power back at peak times. It said it would enable more drivers to choose electric vehicles by supporting an energy network that would power 10 million of them by 2030, and will publish an electric vehicle strategy to support that aim.
Low-carbon heating options for homes could include using hydrogen boilers or electricity to power heat pumps, and may see more customers connected to heat networks. The regulator said it would use its expertise to work closely with government as it develops its strategy to decarbonise heat.
Ofgem said it recognised that there are trade-offs to overcome, such as how to fairly spread the cost of a low carbon energy system between today’s and tomorrow’s consumers.
It said the transition to a net zero environment would require the use of new technologies, better use of data, and artificial intelligence to boost flexible demand.
“The transition will also require consumers to be engaged - and to see that the costs and benefits of the transition are falling fairly. How and when energy is used must change. This opens up opportunities for a consumer-led transition, enabled by new technologies,” the regulator said.
The plan focuses on actions to be taken within the next 18 months, but Ofgem said the country was on “an urgent, but decades-long journey towards net zero”.
It added that its approach would continue to evolve and it would develop new actions and programmes as the opportunities arise.
The announcement comes just days after the Environment Bill was re-introduced to the UK parliament, with the aim being to enshrine environmental commitments in law in the wake of Brexit.