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Question for Department for Business, Energy and Industrial Strategy

UIN 73078, tabled on 13 July 2020

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will take steps to ensure that Ofgem policies support an investment-led green economic recovery.

Answered on

21 July 2020

Ofgem, as the independent expert regulator, has an important role in the transition to net zero. Its principle duty is to protect the interests of existing and future consumers, and this includes consumers’ interests in the reduction of targeted greenhouse gas emissions from electricity and gas supply. Ofgem also has a duty to have regard to the effect on the environment of activities connected with the generation, transmission, distribution and supply of electricity and gas. These duties are set out in Part 1 of the Gas Act 1986 and Electricity Act 1989.

Network regulation is a matter for Ofgem – by law Government has no role. In its RIIO-2 Draft Determinations Ofgem has announced £3bn of upfront funding to connect green electricity sources and transmission grid upgrades. In addition, Ofgem is introducing mechanisms to inject £10bn or more of additional funding that companies can access over the price control to drive decarbonisation and infrastructure upgrades as required, and help to drive green and resilient economic recovery.

In its Decarbonisation Action Plan (link to Plan here), Ofgem stated that it would be ‘reviewing the way our energy systems are managed to ensure they are fit for a net-zero future’.