To ask the Secretary of State for Business, Energy and Industrial Strategy, what discussions his Department has had with Ofgem on (a) energy losses in the transmission and distribution system and (b) how those energy losses can be reduced.
For electricity, the network companies have specific licence obligations placed on them by Ofgem to ensure that losses are as low as reasonably practicable, and are set incentives under the network price control framework. It is now widespread practice across Great Britain to replace ‘high-loss’ cables with newer ‘low-loss’ substitutes, where this is efficient. Distribution Network Operators are also undertaking a program of replacing pre-1960s transformers with newer more efficient types.
For Gas, the Health and Safety Executive’s Iron Mains Risk Reduction Programme (IMRRP) is the biggest contributor to reducing losses on the gas network. This involves replacing old, corroded iron pipes with polyethylene (plastic) pipes. In order to support this work, Ofgem are consulting on allowing gas network companies over £8.5bn to invest and run their networks over the next 5 years and to help meet our net zero target. Through the IMRRP, the proportion of iron pipes has fallen from 80% of the distribution network in the mid-1970s to around 20% today, and is forecast to fall further to around 10% by 2026 and 5% by 2032.