
Ofgem will grant the UK’s electricity transmission owners with early access to almost £4 billion of grid investment for equipment and services.
The regulator’s new Advanced Procurement Mechanism (APM) aims to unblock supply chains and help renewable energy projects connect quicker to the grid.
Through the new process, Ofgem hopes that green-lit projects will be ready to break ground as soon as planning approval is granted, reducing delays, control costs and helping attract international investment.
Ofgem director general for infrastructure Akshay Kaul said: “Building a modern, clean and secure energy system is the key to ending our reliance on international gas markets responsible for volatile prices, so we must do everything we can to clear the way for trailblazing projects to move forward.
“The APM is an innovative model that could be extended in the future to develop other areas of the energy sector, and possibly mirrored by other regulatory bodies supporting the delivery of national infrastructure.”
According to Ofgem, the APM framework could help UK transmission owners reduce risk of costly supply chain delays and lowering or control build costs by purchasing materials in advance.
In addition, it could help support growth in domestic manufacturing and attract international investment to British projects while accelerating project delivery.
To minimise the risk of stranded procurement – pre-ordered equipment for projects that do not progress – Ofgem will ensure that only equipment that is transferable between many different projects is eligible for APM funding.
More bespoke procurement will be considered on a case-by-case basis to assess the benefit and risk.
Reacting to Ofgem’s announcement, SP Energy Networks CEO Nicola Connelly said: “The £75bn proposed investment in the transmission system is the foundation of the government’s growth ambitions, unlocking grid capacity for homes and businesses, moving homegrown clean energy around the country and reducing constraint costs for consumers.
“That’s why the speedy delivery of this national infrastructure upgrade is critical.
“Securing our supply chains early for cables and other equipment is vital if we’re to re-wire Britain at record pace. This is good news for growth, good news for jobs and good news for electricity consumers.”