Ofgem Electricity Transmission Advanced Procurement Mechanism – BEAMA Consultation Response
11 December 2024
BEAMA have submitted a response to Ofgem’s consultation on the Advanced Procurement Mechanism (APM). Once introduced in early 2025, this will provide billions of pounds in allowances for transmission owners (TOs) to buy essential equipment – such as switchgear, transformers, cables and steel – years in advance of when it is needed, and often before their project has been finalised. Ofgem hopes that this streamlined process would ensure green-lit projects are ready to break ground as soon as planning approval is granted, with the key construction equipment already in place.
BEAMA’s view is that without a fuller picture of the timelines at which Ofgem will approve projects (in principle, and, or in full) and relatedly, the timelines within which TOs will place firm orders against expected project delivery times, it is not possible to assess whether the APM as proposed will allow GB to catch up with other countries as an attractive location for the relevant multinational suppliers.
Several changes are needed to give manufacturers confidence to invest in growing their capacity, and allocating this capacity to GB:
- TOs need to place full firm orders with their supply chain much earlier
- TOs’ procurement behaviour, and Ofgem regulation will also need to change from approving and procuring individual projects to procuring programmes of work in bulk.
- TOs should move to a strategic partnership approach that is characterised by longer-term relationships and more collaboration with the supply chain.
- It is essential that TOs work on harmonising what they procure, so that they purchase fewer different variations of equipment. They should begin by harmonising system ratings as a matter of urgency.
BEAMA will engage with Ofgem on an ongoing basis. Members interested in the APM should contact [email protected]
