Regulator slashes 拢2.1bn from firms鈥� original spending plans

economics

Ofgem has approved plans to spend 拢17bn upgrading the UK鈥檚 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鈥檚 electricity network.

The sixth firm, Western Power Distribution, had its plans approved in November last year and will spend 拢7.1m on network upgrades over the period.

However, the upgrade budget approved today is 拢2.1bn less than the five firms originally proposed because Ofgem disallowed 拢1.4bn of spending because it did not meet its benchmarking costs and demanded a further 拢700m of savings from the companies.

Ofgem said the distribution element of fuel bills will, on average, be 拢12 a year lower over the period than it is today.

Dermot Nolan, Ofgem chief executive, said the plans would deliver 鈥渆fficient investment at a lower cost for the customer鈥�. 

He added: 鈥淒uring 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鈥檚 regulation focuses companies鈥� attention on connecting these low carbon technologies in a timely and cost effective way, using smart solutions where appropriate.鈥�

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