Select Committee on Environmental Audit Written Evidence

Memorandum submitted by the Energy Networks Association (ENA)


  1.  ENA is the industry body of the licensed electricity and gas transmission and distribution companies in the UK. We welcome the opportunity to provide our views on this inquiry.

  2.  It is our view that changes in the fuel mix should not be contemplated without due consideration of the impacts on the transmission and distribution networks.

  3.  One of ENA's core values is minimising the environmental impact of networks, including environmental change.


  4.  Renewable generation sources such as wind will bring a range of changes to networks, including a need to address stability, intermittency, security and plant margins issues. At distribution level there will be an impact on how networks have to be designed and operated, potentially transforming them from largely "passively" managed to more "actively" managed systems. The ENA recognises that this is technically possible but the changes will require time to research, prove reliably in the field and then to build into the networks. There will also be a concomitant requirement for investment.

  5.  Development of nuclear power or new forms of large-scale centralised generation (including gas and coal) plant will have implications for the higher voltage transmission networks through the location and design of new power stations. There could be considerable demand for new or augmented network infrastructure.

  6.  There are also increasing pressures on the configuration of the transmission network arising from the EU internal market and the effect this will have on interconnection and cross-border requirements.


  7.  The regulatory framework for the energy network companies will need to be adapted to accommodate the technological developments outlined above. The existing regime has been successful in removing inefficiencies, resulting in network charges to customers falling by 50% in real terms since 1990. Additional elements have been added to the simple RPI-X model to incentivise reductions in losses, improve quality of supply, and support for distributed generation and network innovation. However, it will be necessary to consider whether the current framework of incentives gives sufficient weight to long-term considerations of the environment and network development. If not, can it be adapted to accommodate them or do we need a different, more strategic approach to deliver the kind of networks which will be required in response to the long term needs of customers? It will be important for such a debate to begin now during the current transmission price review and ahead of the forthcoming gas and electricity distribution reviews.


  8.  The bulk of the existing electricity transmission and distribution system was built in the 1960s to meet the needs of a very different electricity generation paradigm. Principal asset lives are typically 50 years.

  9.  A considerable deficit is developing in engineering skills, which may constrain the ability to build and operate the networks of the future.


  10.  Successful deployment of generation by whatever technology is tied inextricably to parallel developments in networks. We are concerned that energy policy and how this is reflected in the regulatory regime for networks does not adequately deal with the need to synchronise developments in generation and infrastructure.

28 September 2005

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