Ofgem’s new government-enforced mandate to ensure the UK’s energy sector reaches net zero by 2050 is set to unlock billions worth of new investments, according to the industry.
An extra £15bn could be injected into wind power by the end of the decade as a result of the new legislation speeding up grid connection waiting times, trade body RenewableUK forecast.
Ministers proposed the amendment to the UK’s Energy Bill on Wednesday which will legally require regulator Ofgem to support the sector’s transition toward a 2050 net zero target.
This will replace Ofgem’s current main purpose of protecting the interests of “existing and future gas and electricity consumers”.
“Ofgem welcomes this mandate which brings us in line with the UK government’s legal obligations and, for the first time, directly links consumers’ interests to specific net zero targets,” chief executive Jonathan Brearley commented.
“It underlines net zero is the best option, not only from a climate perspective, but to ensure a secure, low-cost energy future,” he added.
Under the new net zero duty, Ofgem will be required to prioritise the government’s 2050 target, laid out in the 2008 Climate Change Act.
“The Government’s landmark decision […] is essential to change how we prioritise building vital new infrastructure to connect clean energy projects to the grid,” RenewableUK explained.
Placing the government’s net-zero goal at the centre of every decision, which Ofgem will have to prove it has done, will be key in speeding up new grid connections, the group added.