UK network providers face £24bn investment obligation

British energy regulator Ofgem has revealed proposals that will force the UK’s six power distribution companies to invest £24.4bn in the country’s networks between 2015 and 2023 as part of a price control initiative designed to reduce consumer energy bills.

The proposals follow on from Ofgem’s decision in March to fast-track Western Power Distribution’s (WPD’s) business plan that will see the company invest over £7.1bn in upgrading and maintaining its distribution network ( see EDEM 3 March 2014 )

WPD’s business proposal was the only one of the six companies that was deemed acceptable by Ofgem, which has proposed the other five network companies pour an additional £17bn into upgrading the network.

If Ofgem’s proposals are taken forward, SP Energy Networks will be forced to invest £3.2bn, SSE £3.4bn, Northern Powergrid £2.9bn, UK Power Networks £6bn and Electricity north west £1.8bn.

A spokeswoman for Ofgem said the network upgrades could include new connections crucial for ensuring that power generated from renewables in isolated locations can be transported efficiently to the grid.

Upgrades to network connections in Scotland – overseen by SP and SSE – have previously been thought capable of increasing export capacity from Scotland to England from 3.7GW to 7GW ( see EDEM 23 April 2012 ).

Plans for renewables projects in isolated regions of Scotland, including outlying island territories, have hit the buffers in recent times because of concerns regarding the affordability of transmission cables.

Ofgem’s proposals have been presented for an eight week consultation period before its final decision is published this November. Henry Evans