Increased socialisation of connection costs in the distribution electricity network

2

Partial Socialisation

Fairness

Removes first mover disadvantage. There will be some benefits in terms of fairness but lower than options 3 and 4.  This is because, while some of the first mover disadvantage has been removed by partial socialisation, there will still be cases where the first customer to connect pays more than others who connect to the same line at a later date.

3

Vulnerable Customers

This option is cheaper than options 3 and 4 by £0.80 and £0.85 per year respectively. It therefore impacts vulnerable customers’ bills.  However, it has a lower impact on vulnerable customers potentially getting access to modern low carbon heating.  As such it is ranked equal to options 3 and 4.

2

Climate Change and Net Zero

Partial benefit, but lower than options 3 and 4 because there would not be as much of an incentive to connect low carbon technologies and connection charges would continue to be a barrier to take up.

3

Regional Balance

Partial benefit, but lower than options 3 and 4 as connection charges in some regions could still be higher than others.

3

Investment

Less significant benefits for the economy than options 3 and 4, as not as much support given to investment by businesses with the upfront cost of reinforcement.

3

Overall Ranking

3

3

Full socialisation for demand customers only (homes and businesses). Partial socialisation for generators

Fairness

Improves fairness to homes and business but some unfairness remains for small generators seeking a connection to the distribution network.

2

Climate Change and Net Zero

Further incentive for the uptake of low carbon technologies such as heat pumps and electric vehicles.  However, no improvements in uptake of small renewable generation due to connection charges continuing to be seen as a barrier.

2

Regional Balance

Significant benefit, but lower than option 4 as there may still be barriers to the uptake of small renewable generation.

2

Vulnerable Customers

Cost to consumers is £0.80 higher than option 2 but only £0.05 lower than option 4. It therefore impacts on customer bills. It however enables access to modern low carbon heating.

2

Investment

Significant benefit for homes and businesses as more support given for investment with the cost of network reinforcement being socialised. The benefit for generators is less significant than in option 4.

2

Overall Ranking

2

4

Full Socialisation

Fairness

Improves fairness to homes, business and generators connecting to the distribution network.

1

Climate Change and Net Zero

Further incentive for the uptake of low carbon technologies such as heat pumps and electric vehicles.  This will also benefit small renewable generation seeking a connection to the distribution network.  This option performs best in relation to the removal of barriers to connect.

1

Regional Balance

Biggest benefit to the economy through support given to investment with reinforcement being socialised. This option has the most significant benefit for demand and generation customers in all regions compared to options 2 and 3.

1

Vulnerable Customers

While this is the highest cost option, it is only £0.05 higher than option 3. It impacts on customer bills however enables access to modern low carbon heating.

1

Investment

Eliminates network reinforcement costs for homes, businesses and generators. This provides the highest benefits to customers by stimulating investment here and achieving our Climate Change and Net Zero targets.

1

Overall Ranking

This is therefore the preferred option.

1