The UK power transmission system operator (TSO) National Grid has accepted a price control proposal from the national energy regulator Ofgem, which should take effect from April 2021.The company will invest around £10bn (€11.6bn) in its power transmission network by 2026. However, National Grid will appeal to the Competition and Markets Authority (CMA) regarding Ofgem’s proposal to reduce the rate of return for network companies to 4.3%; National Grid previously suggested to limit the rate of return to 5.6%.
In December 2020, Ofgem approved a £40bn (€46.2bn) investment plan for 2021-2026, which seeks to improve the country’s gas and electricity transmission and distribution infrastructure and to deliver emissions-free green energy. Compared to a July 2020 proposal, the parastatal increased upfront spending on infrastructure by £5bn (€5.8bn) to £30bn (€34.7bn) and granted additional funding of £10bn (€11.6bn) for future green energy projects. The plan proposed to reduce the rate of return for network companies to 4.3% (down from the current 6-7%), allowing income from consumer bills to help pay for improvements instead, and to cut more than £8bn (€9.3bn) from company spending plans by setting more ambitious efficiency targets and blocking costs that firms have not justified as delivering value for consumers.
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