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<p>We will be engaging with stakeholders, including network companies, to ensure that
increasing demand can be accommodated, whilst minimising the impact on businesses,
workers and consumers across the UK, building on the significant demand and supply
side measures in place.</p><p> </p><p>The electricity market is already set up to
promote investment in generation capacity to meet demand; for example, the Contracts
for Difference scheme facilitates significant investment in low-carbon generation.
This complements numerous measures to ensure a smarter, more flexible energy system,
increasing the efficiency of the electricity system to prepare for electric vehicles
(EVs).</p><p> </p><p>‘Smart’ charging of EVs (at off-peak times) can reduce demand
from EV charging at peak times; the Government has taken powers in the Automated and
Electric Vehicles Act to mandate that all charge points sold or installed in the UK
must be smart enabled and we have recently consulted on secondary regulations. The
Government has also invested £30 million to support vehicle-to-grid technology, where
the storage capability of EV batteries provides electricity back to the grid.</p><p>
</p><p>Ofgem, the independent energy regulator, is developing its next set of energy
network price controls to incentivise network companies to be ready for the future
needs of the energy system, including the required capacity to support EVs. Ofgem
has a performance-based framework to set price controls, the RIIO (Revenue=Incentives+Innovation+Outputs).
Ofgem uses price controls to determine the revenues companies recover, investment
they make and performance standards they must deliver. Ofgem’s next RIIO framework
will ensure companies make the case for investment needed to support decarbonisation.
As part of the RIIO process, Distribution Network Operators (DNOs) forecast the likely
uptake of EVs, in order to shape investment plans for reinforcing the network. The
regime allows DNOs to seek approval from Ofgem for increased funding, should load
growth be significantly higher than anticipated during the price control period.</p><p>
</p><p> </p><p> </p><p> </p><p> </p><p> </p><p> </p><p> </p>
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