Ofgem sets out plans to hit net-zero carbon emissions by 2050

The plans include putting 10 million electric vehicles on the roads and removing the nation’s reliance on gas central heating, replacing it with more eco-friendly renewable alternatives. The main snag of the ambitious scheme; Who exactly is going to pay for it all?

The electric vehicle plans have been forecasted to potentially cost up to £2 billion per year whilst the aim of replacing the gas central heating of millions of homes could be an eye wateringly high £20 billion by 2050. The EV scheme alone is likely to add £30 to every homeowner’s energy bills.

“We no longer have the luxury of time to explore all options perfectly before deciding to act. Government, industry and Ofgem need to take some risks. Provided energy network companies make the best use of the existing capacity and make a strong business case, Ofgem will consider allowing them to invest in further grid reinforcement so the electric vehicle revolution is not held back by a shortage of charging points,” said the recently appointed chief executive of Ofgem Jonathan Brearley.

Such a comment is unlikely to inspire confidence in the public who have paid the price already for ill thought out or poorly handled schemes such as the often criticised smart meter rollout and last weeks news that Ofgem’s pricing spending rules introduced in 2013 allowed energy networks to make huge profits at the consumers' expense.

At the same time, gas central heating and hot water systems will need to be replaced with electric heating and cleaner alternatives.

However, as anyone who has lived in a property that relies solely on electric heating will attest, it’s very expensive already, getting the public on board is likely to prove a significant challenge.

Ofgem said: ‘Increased uptake of electric vehicles creates a rare opportunity for a win-win-win for society, through lower carbon emissions, improved air quality and a more robust and low-cost energy system. But this will only be achieved if drivers are supported to charge their vehicles typically at off-peak times. Support for drivers using their electric vehicles in novel ways will also be needed, for example by “vehicle-to-grid” technology to share energy from car batteries back to the electricity grid when it is needed.’ Ofgem envisages the number of electric vehicles will surge from 230,000 today to ten million by 2030 and 39million by 2050. It argues this will only be possible if the current total of 30,000 public car chargers rises to 210,000, plus 3,500 rapid and ultra-rapid chargers near motorways.

The plans to fill the roads with EVs and swap gas heating sources with electricity powered renewables will see demand for electricity grow massively. With warnings that the UK is struggling to meet demand already, Ofgem has put its eggs in the wind power basket arguing that electricity generated from wind will become cheaper in the ‘future’.

Either love her or loathe her it seems as though the teenage activist and the likes of the protest group Extinction Rebellion has set a fire under Ofgem to hit the governments net zero targets.

“Britain has come a long way. It has decarbonised faster than any other major economy, but we must go further, particularly on heat and transport. We are taking an approach that recognises that our role protecting consumers includes achieving net zero. As low-carbon renewable energy grows and more transport goes electric, the energy system needs to be more flexible to respond to peaks and troughs in both supply and demand. Our new price controls for network companies will clear the path for this, providing the incentives for investment for the future. It is now vital that the energy industry rises to the challenge and demonstrates how it will work with the Government and Ofgem to decarbonise Britain’s energy system at lowest cost,” said Ofgem.

1. Ofgem will build adaptability into its price controls to ensure network companies invest efficiently and are able to adapt to changes in technology and infrastructure.
2. They will set up a regulatory fund to unlock investment in innovative solutions to tackle climate change.
3. They will explore, with government and industry, opportunities for greater coordination to enable rapid expansion of an offshore grid at lowest cost.
4. Ofgem will harness its existing knowledge and expertise to help government and the industry develop cost-effective and low risk options to decarbonise heating.
5. They are reviewing the way energy systems are managed to ensure they are fit for a net-zero future.
6. They will create a more flexible electricity system to ensure that consumers will benefit from the lowest cost transition to a reliable net-zero system.
7. Ofgem will develop a regulatory strategy on electric vehicles to support roll out and maximise the benefits to consumers.
8. They will support innovation and experimentation, particularly in the retail market, to create low carbon products and services that will directly benefit consumers.
9. They will respond to the need to take big decisions facing a deeply uncertain future by becoming more adaptive in the way they work and in their regulatory approaches.

Charity Citizens Advice has warned that many people do not understand the enormous scale of change that is needed to hit the net zero target and said that the most vulnerable will require help with the extra costs needed to hit them.

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