NIC progress review is a clear route map for accelerated energy policy

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Date

May 17, 2024

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https://regen-55407a.webflow.io/insights/nic-progress-review-is-a-clear-route-map-for-accelerated-energy-policy

WRITTEN By

Merlin Hyman OBE

Chief executive

Regen welcomes the National Infrastructure Committee's 2024 progress review, which calls for 'a concerted catch-up programme' to ensure the country's infrastructure is fit for the future.

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Table Contents

At a glance

Key takeaways

We were pleased to see the latest Infrastructure Progress Review from the National Infrastructure Committee (NIC), much of which aligns with Regen's thinking. The clarity of advice is particularly welcome, including:

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1
Ruling out government support for hydrogen heating to help industry plan and invest and avoid further delaying the decarbonisation of heat.
2
Planning for the end of natural gas for heating, including ending new connections to the gas network from 2025, regulating to end the use of fossil fuel heating in large commercial buildings by 2035 and ending the sale of all new fossil fuel boilers in 2035.
3
A firm policy to deliver a total of 60 GW of short duration flexibility by 2035, including completing the REMA consultation and bringing forward a final business model for long duration energy storage.

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Our team is digging into the report in more detail, but some other noteworthy recommendations that are potentially crucial mile-markers in the road to a net zero energy system include:

Creating a 25 TWh strategic electricity reserve.
Limiting unabated gas power to generate less than 2% of electricity by 2035, preventing it from participating in wholesale, balancing and capacity markets by 2040 and shortening the length of Capacity Market agreements to avoid locking in sites beyond 2040.
Completing the setup of the National Energy System Operator (NESO) and Regional Energy Strategic Planners (RESPs), and ensuring the NESO brings forward the first Strategic Spatial Energy Plan (SSEP) by 2025.
Increasing incentives for households and businesses to switch to heat pumps, including a fund to reduce the upfront costs and ensuring the running costs are lower than that of gas boilers, and committing long-term funding to deliver low-carbon heat across the public sector estate, social housing and households on lower incomes.
Beginning planning for the process of decommissioning or repurposing the gas network and disconnecting customers, including ensuring a mechanism for local democratic input, to inform development of the RIIO-3 price control which will begin in 2026.
Recognising the Contracts for Difference (CfD) mechanism as the best way for the UK to bring forward renewable capacity.

We're looking forward to contributing to the NIC's next important review of ensuring the distribution network is ready for net zero. Our report Electrification: The local grid challenge, released this week, warns that we must learn from the failure to invest earlier in the transmission network and make local grid upgrades a critical infrastructure priority before constraints start appearing.

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