Britain faces significant challenges
in its green energy transition.
The government and industry alike
are grappling with the fundamental question of
how to get energy from the north of the country,
where there’s an abundance of wind,
to demand-hungry areas in the south,
and perhaps more importantly,
how to price that energy.
Two options that are being considered is one
is to retain our national pricing market
with liberalised decentralised market trading.
And the other is to move to some form of
zonal pricing, where the market effectively
will be split up into maybe 12 or 14 zones
and prices will be set within those zones.
It would be a really radical market change,
and this is coming right at a time when we need
to encourage GBP 40-50bn of
investment to deliver the Clean Power Plan by 2030
and beyond that to achieve net zero.
The TSO National Grid is investing
around GBP 60bn over five years
to expand and reinforce the grid.
For example, to accommodate 50 GW of offshore wind by 2030,
National Grid aims to deliver around 1000 km of onshore
and more than 4,500 km of offshore network and enabling works.
What they're proposing to do is to add in some bootstraps,
and these are HVDC cables that are coming from Peterhead
and other parts of Scotland down
to northeast and south of the Humber.
The issue is that that allows you
to bypass land-based transmission.
It’s far easier to build transmission
infrastructure in the sea
because fish don’t vote!
By the time
you introduce zonal pricing, the differentials
between the different zones should disappear
if we have all these bootstraps down the country.
The aim of these structural changes is to
get the clean energy to where it's needed
at the lowest cost to consumers.
But huge question marks remain
for the new Labour government
due to the sheer complexity of the
task and the limited time available.
