The UK regulator of energy markets (Ofgem) announced it will cut the allowances of several UK electricity distribution network operators (DNOs) by around £200m (€227m) for the period 2015-2023. Ofgem already announced its intention to tighten price controls back in July 2017 and estimates that the UK power demand forecast was lower than expected. Ofgem reviewed how much the DNOs had spent over the price control, what outputs they had delivered and concluded that some DSOs did not need to invest as much as they thought in order to strengthen their power network. The analysis includes namely Western Power Distribution (WPD), Scottish Power, UK Power Networks (UKPN) and Scottish & Southern Electricity networks, whose financing is reduced by a total of about £74m.
Some DNOs have also abandoned major investment projects to improve their infrastructure or found other ways to reduce the amount of their investments. This has led Ofgem to shrink allowances by a total of £130m across WPD’s East Midlands network and two of UKPN’s networks.
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