UK energy regulator Ofgem yesterday announced a major, £24.2 billion investment in the country’s electricity and gas networks over the next eight years.
The investment will raise annual household energy bills by an average £12 each year, says Ofgem, but the increase will not be cumulative. By 2012, when the current price control period ends, consumer bills should only be just over £15 higher than they are today.
The regulator says it cut over £7 billion from network companies’ original spending requests to ensure that it kept bill increases as low as possible and represented “value for money for consumers”.
The proposals lay out £19.7 billion for grid upgrades between 2013 and 2021, with an additional £4.5 billion investment that can be released only if energy companies are able to justify the expenditure.
The package earmarks £15.5 billion to update the high voltage electricity network in England and Wales, together with the high pressure gas network across Britain, both of which are operated by National Grid.
Under those plans, new sources of energy generation will be added to the network and a major project will be started to build a sub-sea link to connect Scotland to England and Wales.
Overall, the proposals mean that the total costs of running and maintaining Britain’s energy networks up to 2021 will be £38.2 billion.
Ofgem’s chair, Lord Mogg, said the proposals would attract “the energy infrastructure investment that Britain needs at a fair price”.
For further information:
UK Energy Secretary defends government record on energy costs (18-Dec)
Ofgem plugs £45 million into low-carbon technologies (26-Nov)
UK consumer group Which? calls for energy price review (17-Oct)
Ofgem unveils £22 billion upgrade to electricity and gas networks (17-Jul)
Article source: http://www.energyefficiencynews.com/i/5643/