Ofgem publishes final decision on electricity distribution funding requests
Ofgem has allowed £64m of funding requests by electricity distribution network companies to invest in physical site security, street works and rail electrification projects, and refused around £258 million for projects that it considers are not justified or provide poor value for money.
Ofgem has been consulting on 12 requests for additional funds by network companies for adjustments in their funding under the RIIO-ED1 price control (which runs from 2015-2023).
Requests that Ofgem has approved include:
- £45 million to fund street works activities by five network companies – Electricity North West (ENWL), Northern Powergrid (NPg) Scottish Power Energy Networks (SPEN) UK Power Networks (UKPN) and Western Power Distribution (WPD).
- £16 million in funding to Scottish and Southern Energy Networks (SSEN) for diversions required to facilitate the electrification of the Great Western Railway line.
- £3 million to NPg to invest in sites that require physical site security upgrades.
Requests that Ofgem has refused include:
- £67 million in other street works funding requests.
- £30 million request from SSEN for cable replacement at Pentland Firth East as the DNO has not demonstrated that the proposed solution is economic and efficient.
- £70 million sought by SPEN for cable repairs as Ofgem considers that the level of investment requested is not justified.
- £42 million request from SPEN for work to increase network capacity in anticipation of electric vehicle uptake.
- Ofgem sets four price controls (for gas transmission, electricity transmission, gas distribution and electricity distribution). Price controls for both transmission and gas distribution run from 2013 to 2021. The electricity distribution price control runs from 2015 to 2023. Collectively these are known as the RIIO-1 price controls.
- Ofgem has been consulting on a new set of price controls, called RIIO-2, which will first come into effect in 2021 when the transmission and gas distribution price controls of RIIO-1 have expired.
- See our decision documents.
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