Proposal 20 – Facilitating efficient electricity network investment

4 December 2020

The delivery of efficient and well-coordinated investment in electricity network infrastructure to support the connection of EV chargepoints is needed in order to ensure the electricity system supports the mass take-up of EVs and to minimise EV chargepoint connection costs and delays for the benefit of consumers. Effective management of the uncertainty associated with future EV charging demand is also needed to manage both the stranding risk and that of under-investment in network capacity. 

Ofgem needs to ensure effective regulatory and market frameworks that encourage the development of an efficient, coordinated and economical electricity system able to support demand from EV charging. This includes supporting efficient, economical future-proofing and well-justified anticipatory (or highly anticipatory) electricity network investment that benefits consumers in the longer term. It should also serve the proposed EV charging infrastructure in combination with increasing decentralisation of generation and energy storage and support future wider decarbonisation policies such as Net Zero, and the potential electrification of heat. There is also the potential for efficiencies to be achieved when any anticipatory investment is aligned to asset replacement programmes. Selective investment in Low Voltage (LV) network monitoring to complement smart meter data is critical to enable accurate planning and operation of the LV networks, which in turn will reduce the costs associated with network reinforcement and operation for consumers. 

Consideration should be given to the following points: 

Anticipatory investment is defined in this context as investment made in reasonable anticipation of future electricity demand due to EVs, driven by Government energy policy but in advance of firm (chargepoint) connection requests and maximum power requirement declarations. 

• LV network monitoring, together with appropriate system modelling, is an essential component of an overall network information management capability (along with data from smart meters and potentially smart chargers). Such capability is essential to ensuring that network investment is optimised in terms of targeting and timing and should therefore be considered within the context of anticipatory investments subject to DNO business case justification. 
• Insufficient allowances for anticipatory investment could result in reactionary and ad-hoc network investment, leading to potential connection delays and higher costs, as well as the failure to develop an efficient, coordinated and economic electricity transmission and distribution system. 
• Appropriate ‘uncertainty mechanisms’ should be incorporated in recognition of the potentially large but uncertain timing of the impact of EV charging demand and the need for network investment.