RP7 Stakeholder Consultation WEB - Flipbook - Page 13
Cost of investment
Alongside recognising the need to take
an ambitious and innovative approach
to future-proofing our electricity network
during RP7, we remain acutely aware
that we are making these proposals in
the midst of a cost of living crisis and
that rising energy costs are a huge
source of concern to customers.
So, our aim is to strike a balanced
position in our RP7 plan which
facilitates provision of a safe, secure
and high-performing network; enables
decarbonisation and meeting the
targets that have been set; facilitates
access to new services and markets
for our customers; encourages
customers to make the right energy
decisions through access to energy
information; and ensures a just transition
which recognises those who may be
vulnerable in our society. We will also
work hard to apply downward pressures
on costs where we can, by focussing
continually on operating as efficiently
as possible.
For RP7, we estimate we will need to
almost double our levels of investment
in the electricity network compared to
that in RP6 – from £1.4 billion in RP6 to
£2.6 billion in RP7. However, we expect
transformational changes in society,
such as the electrification of transport
and heating, to lead to greater electricity
consumption in future compared to
today, which will help spread the costs
more widely. It is important to note
also that the bulk of our investment is
in long-life assets so, while the overall
cost is significant, the charges levied
on customers to pay for those assets is
spread over a long time period (so the
annual cost will be much smaller).
downward pressure on average network
charges which means we estimate
we can deliver the increased levels of
investment during RP7 whilst keeping
distribution network unit charges (in real
terms) in line with those of RP6.
Next steps
This consultation will run until 25
October 2022. We welcome all
feedback and we will use it to finalise
our RP7 business plan for submission
to the Utility Regulator in March 2023.
Details of how to respond can be found
on page 20.
We are estimating that the volume
of electricity transported across our
network will, on average, be around 10
per cent higher during RP7 compared
to average levels in RP6 as electricity
replaces fossil fuel usage. This will put
RP7 Stakeholder Consultation
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