Last week, Ofgem visited VIRTUS Data Centres at their Stockley Park Campus to learn more about the role data centres play in Britain’s energy future. We toured the data centre campus to understand how these facilities operate, the growth potential their expansion represents for the UK economy and what this means for energy demand. We also discussed the grid connection, economic, social and environmental implications of data centres and how companies like Virtus can positively work to improve these. As AI and digital infrastructure expand, Ofgem is focused on regulating both the use of AI in the energy sector and managing the connections demand from new data centres and where these should be located. Collaboration like this helps us prepare for a secure, sustainable energy system. #EnergyFuture #DataCentres #AI #Sustainability #EnergyRegulation #DigitalInfrastructure #NetZero #Growth #CleanEnergy
Ofgem
Utilities
London, England 99,962 followers
Britain’s independent energy regulator, protecting consumers by working to deliver a greener, fairer energy system.
About us
Ofgem is Britain’s independent energy regulator. Our role is to protect consumers now and in the future by working to deliver a greener, fairer energy system. Community guidelines: https://www.ofgem.gov.uk/ofgem-privacy-policy Please note our comment and moderation policy www.ofgem.gov.uk/comment-and-moderation-policy
- Website
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https://linktr.ee/ofgem
External link for Ofgem
- Industry
- Utilities
- Company size
- 501-1,000 employees
- Headquarters
- London, England
- Type
- Government Agency
- Specialties
- energy regulation, energy, green energy, gas, electricity, and consumer protection
Locations
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Primary
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10 South Colonnade
London, England E14 4, GB
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Commonwealth House, 32 Albion Street
3rd Floor
Glasgow, Scotland G1 1LH, GB
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Tŷ William Morgan, 6-7 Central Square
Cardiff, Wales CF10 1EP, GB
Employees at Ofgem
Updates
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📢 Episode 4 of our podcast Inside Energy is out now! We look at how battery storage, offshore wind and rooftop solar are changing the UK’s energy system. 🎧 You can listen now on podcast streaming services, or by clicking here: https://ow.ly/e0vT50XxoVS
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This November marks Ofgem’s twenty-fifth anniversary. As we contemplate the future, here is an interesting episode from the past. Fifteen years ago, a new connections regime called Connect & Manage was introduced by the Government. Its aim was to speed up the connection of renewable power to the electricity grid. It gave new generators firm access to the grid before the network could be reinforced to accommodate their output. Firm access means that if a generator is asked to switch off due to insufficient grid capacity, they are compensated for doing so. Consumers pay for these “constraint costs” in their electricity bills. There was considerable disquiet in Ofgem and National Grid about this at the time. It is not hard to see why. Connecting generation before the grid is ready is a sure-fire way of increasing congestion. Ofgem feared that constraint costs would spiral out of control. The Government was aware of this risk but considered that carbon savings from cleaner renewables displacing coal and gas might be worth it. A regime to monitor costs and benefits was duly set up. Ofgem submitted regular reports to DECC from 2011 to 2015 chronicling faster grid connections; growing carbon savings and rising constraint costs. By the sixth and final report (see attached): 1. Incremental carbon savings (6m tons; worth c.£30-120m at 2015 carbon values) were broadly matched by the incremental constraint costs (c £120m); and 2. National Grid (ESO) was forecasting that incremental constraint costs would go down to zero by 2018 as network reinforcements arrived (albeit Ofgem seems sceptical of the underlying modelling). It looked like the Government’s policy had paid off. It’s fair to say that incremental constraint costs did not go down to zero as predicted. Wind power stormed from 5% in 2010 to over 30% of the mix by 2024; while network upgrades such as the Eastern HVDC link did not arrive by 2024 as planned. In fact, the three transmission operators did not even submit a needs case for the Eastern link to Ofgem until October 2020, by when the earliest completion date was already 2029! Constraint costs are now at £1.7bn pa and rising. What can we take from this story? First, it is difficult to make predictions, especially about the future. Second, some check and balance (and a diversity of perspective) between the Government, the independent regulator and the independent system operator is probably a good thing. The Government and Ofgem are now introducing stronger spatial planning and connection policies with anticipatory network investment to co-ordinate generation and transmission. Although network charges will rise sharply, constraint costs should fall. The NESO’s latest projection sees them peaking at £7bn by 2030 before falling to £1.5-3bn by 2035 if the grid is built out as planned. If LinkedIn still exists then, my successors in 2040 might perhaps read this post with interest to see how things panned out.
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📢 Episode 4 of our podcast Inside Energy is out now! We look at how battery storage, offshore wind and rooftop solar are changing the UK’s energy system. 🎧 You can listen now on podcast streaming services, or by clicking here: https://ow.ly/E9Re50XxoRh
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Ofgem reposted this
It was a pleasure to speak at the Aurora Energy Transition Summit last week. The summit looked into how to deliver Clean Power 2030 securely and affordably, meet rising demand for hydrogen and electricity as well as unlocking the role of batteries in system integration. In my keynote speech, I covered; System planning What that means for regulation What needs to change Retail reform Debt The price cap Innovation Read my speech in full here: https://lnkd.in/g6wdyyse
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Ofgem reposted this
I'm speaking at the Utility Week Forum tomorrow morning (10:50) giving an Ofgem perspective on Infrastructure - with a focus on the areas I cover, Strategic Planning and Connections. I'm being interviewed by Editor-in-Chief James Wallin. Hard-hitting questions have been promised... #UWF
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📢 Inside Energy Ep 3 out now! Met Office scientist Dr Emily Wallace talks about the climate crisis and how the energy industry needs to lead the way. 🎧 You can listen now on podcast streaming services, or by clicking here: https://ow.ly/ebfT50XsRze
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📢 Inside Energy Ep 3 out now! Met Office scientist Dr Emily Wallace talks about the climate crisis and how the energy industry needs to lead the way. 🎧 You can listen now on podcast streaming services, or by clicking here: https://ow.ly/5eYQ50XsRtJ
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Ever wondered where every £1 of your energy bill goes? 💭 Here’s our pound pie chart that shows how it’s sliced. *Figures are approximate due to rounding 🔶 Energy costs – 39.3p: This is the wholesale cost of the gas and electricity you use. 🔶 Infrastructure – 22.6p: Pays for building and maintaining pipes, wires, and networks that deliver energy to your home. 🔶 Policy costs – 13.4p: Supports government schemes like renewable energy and help for vulnerable customers. 🔶 Operating costs – 11p: Covers day-to-day running costs for energy suppliers and the cost of the smart meter rollout. 🔶 VAT – 4.8p: The tax added to your bill. 🔶 Debt – 3p: Helps suppliers manage unpaid bills. 🔶 Industry charges – 2p: Costs relating to the operation of industry bodies that are generally passed through to suppliers. 🔶 Other costs – 1.6p: Headroom allows suppliers to manage uncertainty in their costs. Levelisation makes sure prepayment and Direct Debit customers pay the same standing charge. 🔶 Earnings before interest and tax – 2.6p: Profit made by suppliers before taxes and interest.
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