This response has been prepared by experts from the UK Energy Research Centre (UKERC) and the Energy Revolution Research Consortium (EnergyREV). The focus of our submission is drawn from activities where our research provides insights. We welcome the enquiry and would be happy to provide additional information.

Our submission seeks to provide a pragmatic discussion of issues and it is important to note that there is not a ‘right answer’ to several of the questions the Committee have posed. In some cases, the key challenge is to choose an approach (for example the split of responsibilities between the government and regulator) and then ensure that best principles of good governance are followed so that the arrangements chosen work effectively. In what follows we illustrate how the role and remit of the regulator will change if the mix of competition and planning shifts, ultimately a political choice. We also highlight the need to see ‘least cost’ in a broad context.

Notwithstanding all of this, the net zero target has fundamental and far-reaching implications for the energy sector. The scale and pace of the changes needed are completely unprecedented. A regulatory framework designed for a largely static environment where markets and networks change incrementally may not be right for a context of transition and transformation. As result, we do not believe that the regulator can continue on the basis of ‘business as usual’. The challenge of net zero needs to be reflected in Ofgem’s principal objective and in the way in which the balance of objectives are described and conceived.