The UK’s energy regulator Ofgem on Wednesday launched a consultation on a proposal to set up a new investment fund of up to $10.1 billion (£8 billion) that would help energy transmission owners to fast-track projects and control costs.
Ofgem’s consultation, which runs until December 18, is on a new investment fund worth between $6.3 billion (£5 billion) and $10.1 billion (£8 billion), also as part of a push to “beat other nations to attract international investment in the drive to net zero,” the regulator said in a statement.
The proposed Advanced Procurement Mechanism (APM) would provide allowances for transmission owners to buy essential equipment – such as switchgear, cables and steel – years in advance of when it is needed, and often before their project has been finalized.
Thanks to this mechanism, approved projects would be ready to break ground as soon as planning approval is granted, with the key construction equipment already in place, Ofgem says.
“Across the world many countries are stepping up their investment in clean energy at the same time, putting unprecedented pressure on the supply chain as growing demand for essential materials forces up prices and lengthens delivery times,” said Akshay Kaul, Director General, Infrastructure, for Ofgem.
“This is why it’s vital that we help the electricity transmission owners move quickly, procuring at scale as early as possible to reduce financial risk,” Kaul added.
The proposal for a new procurement fund is in line with advice by the National Energy System Operator (NESO), which has recently called for a step change across the energy sector to achieve clean power by 2030, Ofgem said.
Britain’s transition to a low-carbon energy system is fraught with challenges, NESO warned in a report earlier this month.
Massive investments in transmission and demand pattern changes are among these, the new state-owned grid operator said, as well as keeping natural gas-fired power plants as backup reserves even after the transition targets have been hit.
By Charles Kennedy for Oilprice.com