British energy regulator gave the goahead on Tuesday for up to 40 billion pounds 53.4 billion in spending by the countrys energy network companies between 20212026, partly aimed at preparing the grid to deal with more renewable generation.
Under Ofgems price control system, network operators present plans with their cost, which the regulator then assesses. The regulator also sets a profit limit.
The plans approved included spending of 30 billion pounds, which was 5 billion higher than an earlier proposal, without giving a precise breakdown of any projects this would cover.
In addition to that, it said 10 billion pounds would be used for future green energy projects, including expanding the grid to deal with a planned rise in installed offshore wind capacity to 40 gigawatt GW. Offshore capacity is now about 10 GW.
Ofgem said there is no limit on the additional funding that could be provided, subject only to companies making good business cases.
Ofgem limits the profit network firms can make, setting the rate of return on equity at 4.30, up from an initial proposal of 3.95 made in July. Companies are currently allowed rates of return on equity of 67.
Britains energy infrastructure is owned by several firms, including SSE, National Grid and Iberdrolas Scottish Power.
By lowering returns and demanding more efficiency, the latest price control would deliver 2.3 billion pounds in savings for customers over the 202126 period, helping cut the average bill by about 10 pounds…