Industry regulator Ofgem has come under further fire on their proposed new price controls, this time from National Grid. The grid owner and operator claims that the proposed cuts in revenues to network companies will stymie investment in transmission and distribution assets, increasing the risk of power outages during severe weather events.
The new round of price controls, known as ‘RIIO-2’, are designed to cut the profits of distribution and transmission network operators and provide better value for money to consumers. This came after Citizens Advice found in 2017 that energy networks, under the previous price control framework, had made £7.5 billion in unjustified profits.
However, National Grid believe that the planned cuts are too severe, and mean that it could take up to 100-years to replace important and degrading assets, which will significantly decrease network resilience and increase the risk of future power outages.
Nicola Shaw, Executive Director for the UK at National Grid, said: “In bad weather it could mean that overhead lines aren’t resilient and will struggle to stay in-place – that’s a real worry.”
National Grid’s public criticism marks the continuation of a spate of negativity against the plans after a number of operators came out last month to say that the proposals put at risk the UK’s net zero target.
However, a spokesperson for the regulator said recently that they will continue to back projects where there is strong evidence to support them and that this will “help keep network charges affordable while allowing more investment to help fight climate change and maintain security of supply.”
A final decision on the proposals is due to take place in December.
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Call: 01252 560 379
Email: info@carbonxgen.com
