National Grid yesterday attacked the energy regulator and its £22bn investment plan, saying Ofgem's proposals to upgrade the UK's energy infrastructure lacked "the essential investments to provide safe, reliable networks".
Ofgem's plans would see every household in Britain pay an average £11 extra a year for extensive upgrades of the gas and electricity network.
Some £15bn would be spent on renewing the high-voltage electricity network in England and Wales and the high-pressure gas networks across Britain, plus the building of new sub-sea electricity cables linking England, Wales and Scotland, which would create around 7,000 jobs. Another £7bn would be spent on low-pressure gas networks which deliver gas to homes and businesses.
But National Grid, the country's biggest energy distributor, immediately hit back saying the investment was not enough.
Its proposals demand £30.7bn to upgrade electricity and gas networks between April 2014 and March 2021.
It denounced the regulator's plans, saying: "These initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for the UK consumer and avoid delays to the achievement of the UK's environmental targets."
National Grid maintained Ofgem's £22bn investment was inadequate.
"The financing packages proposed do not, on either a stand-alone basis or in comparison with other regulatory outcomes, adequately reflect the increased scale of investment and implicit risk associated with the major investment required in the coming years to build the energy system that our customers will need in the future, whether in transmission or distribution infrastructure."
In the City, analysts warned Ofgem's proposals meant National Grid will probably have to cut its dividend next year, as well as raise capital.Reuse content