Energy regulator Ofgem has today announced £24.2bn will be spent upgrading the country’s gas and electricity networks over the next eight years.
But the proposed spending levels in the next spending period – 1 April 2013 to 2021 – is £7bn less than the network companies had originally asked for.
The majority of the proposed investment, around £15bn, would include the upgrade and renewal of the high voltage electricity network in England and Wales and the high pressure gas networks across Britain. A further £8.7bn will be spent upgrading Britain’s low pressure gas networks.
Ofgem has included an additional £500M to allow transmission companies to reduce impact of the upgrades in areas of natural beauty, and a further £470M to put new cables underground.
The spending also includes the building of a sub-sea link to connect Scotland with England and Wales.
“Ofgem’s new and innovative price control - RIIO [Revenue= Incentives+Innovation+Outputs] - delivers a sound regulatory environment that protects consumers by attracting the energy infrastructure investment that Britain needs at a fair price,” said Ofgem chairman Lord Mogg.
“This provides a framework of strong incentives and penalties to stimulate the innovative and efficient operations of Britain’s energy companies.”