OFGEM confirms £185M National Grid spending cut

OFGEM confirms £185M National Grid spending cut

Ofgem has confirmed it will reduce National Grid’s spending allowance for running the electricity grid and gas main.

It follows a mid-period review of the 2013-2021 energy transmission price controls and the regulator’s plans to cut spending by £185 million last year.

The changes in allowances mean a £168.8 million reduction for the high pressure gas pipeline price control because the Avonmouth project National Grid planned to build are no longer needed.

Its allowances for the electricity grid price control will be cut by £38.1 million as less fault protection works are needed due to fewer generators connecting to the high voltage grid.

However, Ofgem has accepted the £21.5 million allowance for system operation as it states the power system is going through “major changes” as the UK moves to a low carbon economy and it believes National Grid, as system operator, will have a bigger role to play.