Ofgem believes the costs of a proposed upgrade to the high-voltage grid needed to connect the Hinkley Point C nuclear station in Somerset can be reduced.

National Grid submitted its economic case for an £840 million upgrade of the network to connect the power station back in March.

The watchdog is challenging about 20% of the proposed costs, based on its experience of tendering for offshore wind farm connection contracts.

Consultation launched

Ofgem has launched a consultation on two possible tender regimes:

► National Grid could put the construction, financing and operation of the new infrastructure out to tender, with the winning organisation financing, building and operating the link on behalf of National Grid for 25 years, with competition between bidders setting how much revenue the winner could earn;

► or National Grid would build the link, with Ofgem setting its revenue for building and operating the link over 25 years based on what it thinks costs would have been if it had tendered the construction, financing and operation.

A decision is expected late next year or early in 2019.

> Take part in the consultation