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Electricity networks in the UK have been listed as one of many ‘frontier’ sectors that the UK government is prioritising in their new Industrial Strategy.
The landmark plan, developed by the UK government alongside industry, trade unions, and workers across the UK, aims to create a policy roadmap that will drive economic growth and turn the UK into a global leader in clean energy via its ‘Clean Energy Superpower Mission’.
To this end, under the strategy, the government has said that the electricity networks will be fundamental, providing a number of foundational inputs to the growth driving sectors, including HVDC cables and transformers, acting as a cross-economy enabler of growth.
According to the plan, onshore grid expansion could contribute £4-11 billion ($5.4-15 billion) in GVA and support an additional 50,000-130,000 new full-time equivalent (FTE) jobs by 2050.
To lay the foundations for this growth, the plan aims to ensure that Britain’s electricity network supply chains grow rapidly, allowing clean power projects to connect to the grid.
Commenting in a release was Chris Norbury, chief executive of E.ON UK: “We welcome the government’s bold ambition to put clean energy at the centre of the UK’s industrial strategy. This is a once-in-a-generation opportunity to grow the economy, strengthen energy security and create skilled, secure jobs across the country.”
Said Claire Mack OBE, chief executive of Scottish Renewables: “Scottish Renewables has been urging the UK government to be bold in removing barriers to investment and we’re pleased to see the ambition outlined in this strategy, including measures to build a grid fit for the future, drive competitive supply chains and grow exports.”
Network action plan
To boost the country’s power network, the plan lays out the follow action points:
- Ensuring investment certainty:
Under the plan, the UK government says they will engage with the electricity networks sector to develop an industry growth plan that will unlock domestic supply chain opportunities and develop the skilled workforce needed.
By assessing current UK capabilities and identifying promising growth areas, this will enable greater collaboration to establish coordinated actions.
They will work closely with NESO, Ofgem and industry to encourage greater sharing of data and early estimates of future demand for equipment and services, to provide the supply chain with confidence to invest in the UK.
They will also collaborate with Ofgem, network operators and wider industry to maximise the value of the electricity networks sector to the economy.
This will include the development of an Industry Growth Plan during 2025 to set out the future priorities for the health and success of electricity networks sector incorporating elements such as the growth in the supply chain, in local jobs and considering industry led domestic content ambitions.
- Catalysing public investment:
The government says it will ensure the networks sector benefits from a Public Finance Institutions offer, which will crowd private investment into sustainable supply chains in the UK.
The National Wealth Fund (NWF), they add, will invest in the development of low-carbon power generation, flexibility and storage technologies and their supply chains.
Under the plan, the government will support Ofgem’s new Advanced Procurement Mechanism, which will enable Transmission Owners to access constrained equipment by allowing them to secure supplier capacity and factory slots earlier in the project development cycle. They will also continue to work with Ofgem to ensure that the wider regulatory environment will support growth of the domestic market.
A new market demand guarantee will also be explored to stimulate the domestic production of key electricity network equipment, by providing certainty to the supply chain regarding the size of the future market opportunity.
- Ensuring the workforce is skilled as needed:
Under the plan, skills collaboration will be boosted by working with electricity network operators, Ofgem and the supply chain to identify actions as part of an industry growth plan.
This includes identifying opportunities for sector-wide initiatives and raising the profile of the sector to attract talent in a competitive labour market.
- Breaking down barriers to investment:
Under the plan, a Connections Accelerator Service will boost support for demand projects including prioritising those that guarantee high quality jobs and bring the greatest economic value.
This will build on work undertaken by the government, which claims to have secured £30 billion ($40.8 billion) of investment by supporting key strategic demand investors and working with electricity network companies to secure timely grid connections.
Additionally, the plan states regulatory processes will be amended and connections accelerated for strategically important projects. This will include a power to designate strategic documents, including this Industrial Strategy, to inform allocation of connections, and will enable the government to reserve future capacity on the grid, reducing waiting times for business with major investments in the UK.
In the plan, the government cites Ofgem’s review of the connections process and, to accelerate build times for grid infrastructure, says they will continue to work closely with Ofgem and industry to mobilise the investment required.
The strategy highlights the plan to publish a positive Government Response that largely agrees with the National Infrastructure Commission’s recommendations on strategic investment in the distribution network in summer.
Additionally, government will work with electricity network operators and the supply chain to standardise equipment requirements.
Finally, routes will be explored to drive forward the phase out of SF6 gas from switchgear in electricity network infrastructure, to help UK manufacturers capture an emerging market. The government says they will look to align with the EU process where appropriate.
The government’s Industrial Strategy white paper sets out a 10-year plan to stimulate investment and activity across 8 sectors (IS-8) deemed to have the highest growth potential.
The electricity networks have been detailed under Clean Energy Industries.
