Energy Supply: Industrial Estates
The question
To ask the Secretary of State for Energy Security and Net Zero, what steps he is taking to support the development of private wire networks for industrial parks to reduce transmission costs.
Answered by Michael Shanks
Network regulation and charging arrangements are a matter for Ofgem as the independent regulator. The Government’s role is to ensure Ofgem has the appropriate framework to make decisions in the interests of consumers.
While private wire arrangements may reduce reliance on the public network for individual users, they are unlikely to reduce overall transmission system costs, which are largely driven by fixed investment needed to meet peak demand, security and resilience requirements. In practice, such costs remain and would be redistributed across and recovered from remaining users. Ofgem’s Targeted Charging Review reformed network charges to ensure that all users of the electricity network make a fair contribution to its fixed costs and to address inefficiencies in the previous framework.
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