Regulator slashes £2.1bn from firms’ original spending plans
Ofgem has approved plans to spend £17bn upgrading the UK’s electricity distribution network over the next eight years.
The regulator has agreed the spending plans for the period from April 2015 to the end of March 2023 put forward by five of the six firms that maintain the UK’s electricity network.
The sixth firm, Western Power Distribution, had its plans approved in November last year and will spend £7.1m on network upgrades over the period.
However, the upgrade budget approved today is £2.1bn less than the five firms originally proposed because Ofgem disallowed £1.4bn of spending because it did not meet its benchmarking costs and demanded a further £700m of savings from the companies.
Ofgem said the distribution element of fuel bills will, on average, be £12 a year lower over the period than it is today.
Dermot Nolan, Ofgem chief executive, said the plans would deliver “efficient investment at a lower cost for the customer”.
He added: “During the course of the price control there is expected to be an increased take up of low carbon technologies including heat pumps, solar panels and small-scale renewable generation. Ofgem’s regulation focuses companies’ attention on connecting these low carbon technologies in a timely and cost effective way, using smart solutions where appropriate.”