Energy UK response to Ofgem consultation on DNOs’ future role in supporting the rollout of low carbon technologies

Executive summary

Energy UK believes that the best way for Distribution Network Operators (DNOs) to support the delivery of low-carbon technologies (LCTs) is to provide assistance through data sharing and network upgrades, aligned with broader retrofit schemes. 

Crucially, DNOs should not be mandated to adopt the expanded role as they are inexperienced in delivering LCTs and customer-facing activities but we understand Ofgem’s intention to pilot any options for an expanded role in RIIO-ED3 to identify the challenges and opportunities associated with different models or archetypes, both for the operation of the network and for consumers but we maintain the view that DNOs would still be better suited to the enhanced coordination role.  

Organisations with historic delivery experience and strong customer relationships, such as energy suppliers and Local Government, have significant experience in LCT delivery and will play a core roles in area-based delivery. At this critical stage for the network, the primary focus of DNOs should naturally be on their core RIIO-ED3 price control activity. 

Energy UK does not support DNO funding of LCTs. Increasing costs to consumers via the network charge to support DNO activity in this area would stand in opposition to the Warm Homes Plan’s ambition to bring down energy bills. 

Finally, the system benefits of low-carbon heating and transport should be recognised, where flexible use of these assets could generate £5 bn of network savings per year from 2035.