The draft sets out how it will deliver improvements for customers and accelerate investment in its networks to power communities to net zero.
The UK and Scottish Governments have set clear and binding targets to reduce carbon emissions to address the climate emergency, committing to net zero by 2050 and 2045 respectively. The local electricity networks will be a key enabler of this change as the electrification of heat and transport gathers pace alongside new smart flexible energy solutions.
The Climate Change Committee has forecast that a shift in low carbon technologies (LCTs) could almost treble the demand on electricity networks by 2050. In SSEN's distribution network areas alone, which serve 3.8m customers, electric vehicle ownership is forecast to increase from 30,000 today to 5 million by 2050 with 2.5 million heat pumps installed during the same period.
SSEN's stakeholder-led plan balances the need to accelerate investment in the smart and flexible electricity networks that will meet new decarbonisation demands, while keeping costs down for consumers. It also responds to stakeholder feedback, proposing improvements to service, increased reliability and resilience; and support for those most vulnerable, particularly in the light of the ongoing social and economic impact of Covid-19.
Co-created through three phases of enhanced engagement with its stakeholders, the RIIO-ED2 business plan sets out six clear goals that SSEN will deliver for customers and communities by 2028:
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• Reduce the frequency and duration of unplanned power interruptions by 20%
• Create a foundation for net zero by investing £1bn in strategic resilience across its networks
• Achieve a customer satisfaction score of 9.2 or more (out of 10) in every customer contact area
• Support 200,000 customers in vulnerable situations with targeted fuel poverty, personal resilience or energy efficiency measures
• Facilitate the connection of an additional 1.3 million electric vehicles and 800,000 heat pumps
• Reduce its business carbon footprint by at least 35%, aligned to a 1.5°C science-based target.
SSEN has proposed £4.1bn of investment in its networks and services over the five-year RIIO-ED2 period; this represents an increase of around 35% compared to an equivalent period in the current price control, RIIO-ED1.
Of this investment, £400m will be allocated to improving service for customers and digitalising systems; £2.2bn will be invested in asset reliability and resilience, with half of this targeted investment in network resilience to create a foundation for net zero demands; and over £1bn will help accelerate net zero for communities, including proactive investment in network and flexible solutions to deliver an additional 2GW of new network capacity. All expenditure, including general running costs of £500m, is subject to a year-on-year efficiency saving of 0.5%.
The draft base plan aims to deliver these goals and increased investment with no planned rise in network charges on customer energy bills, supporting a just and fair transition to net zero. This will be achieved through efficiency savings and innovation, coupled with lower financing costs.
Chris Burchell, Managing Director, SSEN Distribution said: "The need to transform our energy system to address the climate emergency has never been clearer and it is critical that local electricity networks are an enabler rather than a constraint as we work toward a shared net zero future.
"Co-created with our stakeholders, we have developed an ambitious and balanced business plan, which provides more, efficient investment today to meet the net zero challenge, while also keeping bills down for current bill payers and supporting those most vulnerable with the challenges of here and now.
"There will inevitably be a degree of uncertainty in the years ahead as energy policy and targets continue to accelerate, therefore it is essential that Ofgem supports us by providing an agile regulatory framework that helps deliver a network where customers can switch to EVs and other net zero technologies with ease at a time they choose.
"We will continue working with our customers and stakeholders over the coming months to further refine our proposals and help strengthen our plan to power communities to net zero."
The draft plan, submitted to Ofgem's Independent RIIO-2 Challenge Group today, is the result of extensive stakeholder engagement, which will now continue and allow the plan to be further refined ahead of its final submission to Ofgem in December 2021.
SSEN is calling on its customers and stakeholders to #PowerOurPlan by visiting www.ssenfuture.co.uk and taking part in the online consultation or one of the targeted engagement events scheduled over the coming months.
