Ofgem has characterised the ED3 price control as a period of significantly higher investment in the physical grid infrastructure. We encourage Ofgem to approach data and innovation with the same zeal, and to enable ED3 to represent a step-change in the availability and quality of data, and in the facilitation of transformative innovation on the distribution grids and in local areas.

Key points

• Ofgem rightly makes the point that “pitting network build against flexibility is a false dichotomy: unlocking the smart, flexible energy system that is required for the energy transition requires DNOs to do both.” Unfortunately, this statement appears on page 113 of the consultation and does not reflect the themes that dominate it. Ofgem should bring this principle to the forefront and anchor the whole ED3 methodology around it.
• The consultation is focused on centralised planning and grid reinforcement. Over-reliance on either is likely to lead to an over-engineered and overly expensive electricity system, which could act as a barrier to decarbonisation.
• Ofgem must maintain in ED3 the conditions that enable distributed flexibility to scale up. This includes helping innovators partner with distribution network operators (DNOs) and make use of data from the local electricity system to develop new products and services that meet consumers’ and the energy system’s needs.