National Grid brands Ofgem’s RIIO-2 draft determinations ‘unacceptable’

New rules to cut spending by network operators risk causing more power blackouts in the UK, according to National Grid

National Grid says a significant number of Ofgem’s RIIO-2 draft determinations and the overall package are ‘unacceptable’ as they could delay investment for the net zero transition and impact the long-term resilience of the energy networks.

The energy company notes its business plans committed to almost £10 billion of investment over the RIIO-2 period, prioritising the reliability of our networks and the transition to net zero.

However, more than 50% of the proposed electricity network investment and around 40% of the proposed gas network investment has not been allowed in the Draft Determinations. 

According to the energy system operator, Ofgem instead proposes to subject some of the plans to additional, time-consuming future approvals processes.

National Grid adds the amount it can invest in electricity network reliability has been cut by 80% and says the energy regulator’s proposals increase the risk to network reliability and resilience and estimates with the current approach it would take around 100 years to replace important electricity network assets – it predicts the level of risk carried on the electricity network will increase by 24%.

That would increase the risk of power outages, particularly during severe weather events, according to National Grid.

An Ofgem spokesperson said: “We’re unlocking unprecedented funding for projects that cut carbon emissions to create a green, fair and secure energy system for consumers now and in the future.

“Investment in energy infrastructure comes from consumers’ bills, so we expect companies to run themselves efficiently and accept lower returns in line with current market conditions.

“Equally Ofgem will only green-light investment proposals where there is robust evidence to support them. This will help keep network charges affordable as investment increases to help fight climate change and maintain the security of supply.”

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