New rules to spark competition in new connections for local power grids

Electricity meterOwners of Britain’s local electricity grids will face new rules from tomorrow (30 Oct) forcing them to open up competition in the electricity connections market – such as for volume house-builders and industrial sites.

The electricity connections market is worth over £500 million – with hundreds of thousands of connections made every year, for example, to new housing estates and business premises.

Independent companies compete against Britain’s regional electricity distribution networks (DNOs) to connect new customers. Effective competition should improve the quality of service that customers receive and reduce the cost of connecting business to the grid.

Over the last five years competition in this market has developed. However, in their region, DNOs are still the sole providers of several essential services needed to make connections. This limits competitors’ ability to control the delivery of their connections and can cause costly delays. Regional variations between services also create additional complexity for competitors.

To address this OFGEM has brought in the first ever code of practice for DNOs, which sets out what they must do to improve competition. DNOs must follow the code rules or they could face enforcement action.

Maxine Frerk, senior partner, electricity distribution, OFGEM, said: “We want to see competition in the electricity connections market thriving. While some DNOs are helping to achieve this, many independent companies still face unnecessary delays and needless complexity.

“This has to stop and our Code of Practice will ensure that independent companies are treated fairly and consistently across the country. This means housing developers, businesses and other organisations will get real choice in who delivers their connections, leading to quicker completion and higher customer service standards.”

Dave Mitchell, technical director at the Home Builders Federation, said: “We welcome the introduction of the new Code of Practice and OFGEM’s move to improve the process of connecting up new build sites. Increasing the number of new homes being built and addressing the country’s chronic housing crisis is a key government target and already output is increasing.”

“As the industry looks to drive further increases in supply, it is imperative that processes are in place to ensure the speedy and efficient connection of new homes to the grid.”

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