Ofgem’s RIIO-2 draft determinations ‘unacceptable’: A significant number of Ofgem’s RIIO-2 draft determinations and the overall package are ‘unacceptable’ says the National Grid, as they could impact the long-term resilience of the energy networks and delay investment for the net zero transition.
The energy network company notes its business plans committed to almost £10 billion of investment over the RIIO-2 period, prioritising the transition to net zero and the reliability of our networks.
However, around 40% of the proposed gas network investment and more than 50% of the proposed electricity network investment has not been allowed in the Draft Determinations.
Ofgem instead proposes to subject some of the plans to additional, time-consuming future approvals processes, according to the energy system operator.
The amount it can invest has been cut by 80% in electricity network reliability 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% adds the National Grid.
That would particularly during severe weather events, increase the risk of power outages, according to National Grid.
A spokesperson from Ofgem 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.”
Ofgem’s RIIO-2 draft determinations ‘unacceptable’