Comment by Tom Luff, Head of Policy and Business Model Innovation at Energy Systems Catapult

Casting an eye over this month’s energy policy landscape, there’s some tantalising signs that the debate is squarely becoming about how we turn a physically decarbonising energy system into an economically compelling one, for both consumers and investors. Innovation is rapidly building momentum, here’s some key developments that you may have missed.

EV charging goes local and traceable

First up, UrbanChain and Believ, two exciting clean tech innovators have extended their partnership to supply the UK’s EV charging network with locally matched renewable electricity, using half-hourly tracking to align charging demand with nearby generation.

What’s compelling here is that this business model reduces exposure to wholesale price volatility and improves transparency over energy sourcing to help the rapid rollout of EV chargepoints.

More broadly, it reflects a shift in EV infrastructure – moving from pure deployment metrics to system integration and local energy matching. This allows charging networks to increasingly behave like flexible participants in the power system rather than simply providing passive demand.

Our work on the secondary supplier model / regulatory diversity could be very relevant here for wider application and expansion.

Energy regulation is shifting from rules to outcomes

There’s some excellent analysis from Ben Shafran (who you may remember used to pen this blog) exploring how the recommendation coming out of the energy department’s review of Ofgem – calling for a General Authorisation Regime (GAR) – signals a quiet but important shift in UK energy regulation.

Instead of tightly specified licences, firms could operate under broader permissions, provided they meet outcomes-based standards.

This is clearly a step in the right direction. Hopefully with continued attention, it can be a gamechanger, unlocking innovation in business models – from energy-as-a-service to integrated flexibility offerings.

I can see there being a trade-off here, resulting in a more supervisory, data-driven regulator but one that helpfully ensures stronger consumer safeguards. The broader story it tells is one where Ofgem moves from “permissioning activity” to “managing behaviour” – drawing parallels with how financial services are regulated – but in a far more infrastructure-heavy sector.

The “abundance agenda” arrives in energy policy

I was excited to read An Honest Day by Mark McVitie for the Labour Growth Group. It frames Britain’s economic challenge as one of managed scarcity rather than productive capacity, arguing that high prices across housing, energy and infrastructure reflect systemic under-supply.

Specifically on energy, it looks at how the UK has already built significant low-carbon generation but failed to convert it into lower bills. The diagnosis is clear – the system is not delivering for consumers. Its core prescription is to shift policy towards “abundance”. This means building more, removing bottlenecks, and redesigning markets to reduce scarcity rents.

Most provocatively, it calls for revisiting locational pricing – a reform we’ve talked a lot about – as part of a wider push to align system design with growth and cost-of-living goals.

Experimenting with granular network pricing

Encouragingly, we’re starting to see others put these ideas into practice with Germany trialling a shift toward dynamic, localised grid fees. This provides a real-world test of how far locational signals can be pushed below wholesale markets.

Under proposals from Germany’s federal network agency – BNetzA – batteries would earn revenues based on where and when they relieve grid congestion, with value varying significantly by location.

Analysis from Modo Energy shows that the resulting material revenue differentials seen across regions reinforces the notion that “where you build” increasingly matters as much as “what you build.”

The UK parallel is Britain’s emerging interest in dynamic distribution use of system (DUoS) and network charging reform, raising the question of when we’ll embrace the full suite of potential options (including markets and mandates) to ration scarce network capacity.

Cheap electricity as the missing link

Finally, a Centre for British Progress report adds to a growing body of analysis pointing in the same direction: electricity costs – not technology – are now a central brake on UK electrification.

While it makes a range of policy recommendations, what caught my eye is the continued call to strip out legacy policy costs and levies from electricity bills, rather than layering more charges onto power prices.

This is increasingly becoming a mainstream policy argument, with growing momentum behind the idea that paying for low-carbon infrastructure sits more efficiently and fairly with the taxpayer, rather than the bill payer.

Taken together, these developments point to a system starting to grapple with a harder truth: building clean power is only half the job – where value shows up, and for whom, is where the innovation is now needed.

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