Journal article originally published in Environmental Innovation and Societal Transitions.
This study analysed uncertainties around the uptake of low carbon technologies (LCTs) across the British electricity distribution networks and how they are being managed within the existing regulatory framework known as RIIO-ED2.
Following the UK’s legal commitment made in 2019 to reach net zero by 2050, the need to decarbonise heating, cooling and transport demands has become an increasing priority. This presents significant challenges for policymakers in accelerating the uptake of LCTs such as EVs and heat pumps. Yet, the potential impacts of demand electrification on the regional distribution networks are only now coming into focus.
Map of electricity distribution networks in Britain (Ofgem)
The study outlines how a scenario-based approach to forecasting LCT uptake in line with the country’s net zero target was implemented by the electricity distribution networks in their long-term investment plans. Based on a detailed analysis of the RIIO-ED2 regulatory review, the researchers identify a tension between ambitious investment planning and the established regulatory model which has been inherited from the liberalisation era.
Uncertainty associated with the uptake of LCTs is creating a need for greater alignment across different parts of the energy value chain. As a result, the role of the regulator is fundamentally altered, from incentivising efficiency in a particular segment of the energy chain – the monopoly networks – to aligning network transitions with wider changes in the supply and demand sides of electricity systems. This will demand a closer alignment of regulation with government energy policy and long-term strategy, along with the uneven pathways and contingencies of regional-level system transitions.