Rural Enterprise

UFU responds to Utility Regulator Draft Determination on RP7

Tyrone countryside. Picture: Cliff Donaldson

By Chris Osborne, UFU senior policy officer

In November 2022, the Ulster Farmers’ Union (UFU) responded to the NIE Networks Consultation, ‘A Future Network for all – NIE Networks RP7 Control – Our approach to planning for 2025-2031’.

We acknowledged what was a very positive body of work, stating that it reflected the significant challenges faced on the journey to reach the goals set out with Climate Change legislation and energy policy.

Since NIE Networks (the grid owner) has a natural monopoly, it is subject to regulation by the Utility Regulator (UR), which in turn determines the amount which NIE Networks collects through bills through price control reviews after scrutiny of the company’s business plans. Therefore, in December 2023, the UR published their Draft Determination.

They proposed that NIE Networks should spend £2.21bn between 2025 and 2031.

NIE Networks had asked to be allowed to spend £2.55billion and the UR determination is 16% lower than the amount requested by the network owner. Whilst lower than the amount requested, the UFU welcome the UR’s acknowledgement of the need for increased investment in the electricity network to facilitate the journey to net zero and to continue to deliver reliability/resilience against the backdrop of what is an ageing network. Specifically, we recognise the £1.349 billion to be spent on capital expenditure, which includes investment in the distribution and transmission networks and metering work.

Whilst the UR have determined a lower figure than NIE Networks requested, the UFU recognises that the UR is by no means proposing that the company delivers less.  This is reinforced by the statement that the draft determination has been made to enable NIE Networks to deliver the investment to facilitate the energy transition.

Crucially looking beyond RP7, the UFU welcome the commitment from the UR that increased investment planned for 2025-2031 is expected to continue for at least two further price control period, which would be RP8 and RP9, reflecting the commitment to meeting net zero obligations.

UFU concurs with NIE Networks that demand for electrification will rise substantially as heating and transport undergo transformational changes.  Yet at the same time, the Network will also need to accommodate conventional connections, namely in the form of farming enterprises wishing to evolve and adapt their energy use, not necessarily small scale renewables, but more energy efficient methods of on-farm production as well as the energy source upon which they rely.

The farming community is adamant that the network must be invested in now to ensure that our farm business are able to function to their optimum capacity on a day-to-day levels but also to enable them to integrate small scale renewable energy generation/low carbon/energy efficient technology into their businesses.

The UFU response to the draft determination on four specific areas will impact upon our members in the delivery of RP7.

1)       Anticipatory Investment

2)       Innovation

3)       Worst Served Customers

4)       Line Diversions

These areas will need adequate funding and we are urging the UR to look at this further.

In our response, we are highlighting that the on-going lack of available network capacity is deterring our members wishing to connect small scale renewable energy to the grid, inhibiting not just economic development but is also holding back our net zero aspirations as an industry. By way of addressing this, our response to NIE Networks RP7 document back in 2022 we called for ‘blue-sky thinking’ in terms of how the grid operates and specifically how our members connect to it.

In the last six months, we have responded to two significant and innovative bodies of work on this very topic; Review of Connections Policy Call for Evidence and NIE Networks Flexible Connections. There has been no further update and we would urge that these bodies of work are expedited, and we would urge that these are considered alongside RP7.

In the context of this Draft Determination and beyond, the UFU believe that there is an overarching need to future proof Northern Ireland’s electricity network, not just to achieve our energy goals but also to allow our industry to operate at its optimum and most efficient capability.

The Draft Determination is open for consultation until 22 March 2024.