BEAMA response to Labour proposals for nationalising network infrastructure

16 May 2019

Clarity on market intentions is needed today to drive investment

Responding to Labour’s proposals to nationalise grid network infrastructure BEAMA call for urgent action and the need for clarity in the market to drive investment.  Such a radical change could seriously stagnate and slow progress in the UK.

The increasing levels of renewable electricity generation, building month by month, needs a modern flexible energy system, linked to demand response mechanisms for buildings, electric vehicle charging, heating and hot water. There have been countless reports from Government, OFGEM and market players outlining what is needed, many of which have the full support of BEAMA companies. The problem is these plans have either not been acted upon, or action has been taken in a piecemeal approach, leaving our climate change objectives un-met and a manufacturing supply chain wavering on what to do next.

Labour’s publication brings into focus the need for accelerated investment in network infrastructure to drive decarbonisation of the end to end energy system. However, BEAMA fear wholescale reform as proposed by Labour could slow down progress which can be made within our existing market.

In recent months BEAMA has been vocal on the need to accelerate investment for low carbon infrastructure, as today we see investment slowing, and in some cases leaving the UK. At a time when we are recognising the urgent need to decarbonise, we must come together to retain the industry needed in the UK to deliver on the needs of the market.  Labour’s proposals may be one solution, although this would take considerable time and therefore risks slowing investment even further and limiting progress to decarbonise. Action is needed today.

BEAMA agrees there are existing regulatory failings which are preventing adequate investment and scope for innovation in the market place. To decarbonise radical change is needed to facilitate new market models and entrants who will drive the flexibility on the system we need today. Any future model (privatised, or publicly owned) needs to allow for new market entrants (e.g. flexibility operators) to extract value from the system and deliver consumer benefits through the facilitation of low carbon generation and technology deployment.  Handing more responsibility back to government won’t necessarily solve the issues the market faces today.

Labour’s regional focus for network management has merit. BEAMA have for a long time advocated for a more localised, regional planning of energy assets and delivery of local energy services, to drive investment, and deliver best value for consumers.   

To read more on our proposals for regional heat networks and market design based on a regional approach, download our Electrification by Design reports here.

BEAMA CEO, Dr Howard Porter stated, ’there is enormous opportunities for the environment, UK manufacturing and energy consumers through timely investments in our energy system. BEAMA members support any debate elevating the current stagnation in investment, but we are cautious of the Labour party’s proposal due to the possible delays this may cause through any wholescale changes to the industry’