National Grid has warned that Ofgem’s proposals to cut network spending could raise the risk of blackouts and delay progress towards net zero.
In its response to Ofgem’s RIIO-2 price control draft determination, the company argues the overall package is “unacceptable” and not in the interests of consumers.
Other network operators including Scottish and Southern Energy Networks (SSEN) and ScottishPower Energy Networks (SPEN) have also strongly criticised the proposals.
In its formal response to the consultation on Ofgem’s plans, which would see the rate of return on network investments almost halve from April 2021, National Grid said they would jeopardise its ability to “maintain resilient and reliable networks and endanger the critical investment required to put the UK on the path to meet net zero targets”.
It also said surveys of consumers, performed by an independent body, showed their preference is for investment in reliability and net zero above short-term bill reductions. Other network companies have also strongly criticised the proposals.
However, the regulator maintained that the reforms will not threaten the UK’s net zero ambitions and said that the new rates of return would bring the energy sector in line with similar sectors such as water.
“Investment in energy infrastructure comes from consumers’ bills, so we expect companies to run themselves efficiently and accept lower returns in line with current market conditions,” said Ofgem.
A final decision on the spending controls will be made by Ofgem in December.