UK's Ofgem has GBP-25bn investment programme for greener network

UK energy regulator Ofgem on Thursday announced proposals that envision an investment of about GBP 25 billion (USD 31.5bn/EUR 27.9bn) over a period of five years to transform Britain's gas and electricity transmission network.

In addition to the GBP-25-billion upfront expenditure, expected to "generate green growth and employment", Ofgem is proposing additional funding to drive green emissions-free energy and infrastructure upgrades. This could see translate into GBP 10 billion or more of net zero investment supported through the price controls.

A new Strategic Innovation Fund will invest GBP 630 million in research and development into key green energy projects, such as hydrogen.

As part of the proposals, the network companies' allowed rate of return will be cut nearly by half, which is expected to save about GBP 3.3 billion over a five-year period for gas and transmission sectors. "Less of your money will go towards company shareholders, and more into improving the network to power the economy and to fight climate change," Ofgem said.

The proposals would reduce network charges on annual bills by GBP 20 per household at the beginning of RIIO-2 price control.

(GBP 1.0 = USD 1.259/EUR 1.116)

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