The transmission companies are in the process of providing further information to support their case for funding for the remaining projects due to start construction by April 2012, totalling a further GBP764m of investment. Ofgem will make assessments and reach a decision following receipt of this information. Ofgem intends to address future funding arrangements as part of the next transmission price control review process.
Stuart Cook, acting senior partner for transmission and governance at Ofgem, said: “The funding proposals will enable vital new generation, much of it renewable, to be connected to the grid.
“Ofgem has been working with industry to overcome delays to critical investments and today’s funding proposals mark a significant step towards facilitating the Government’s 2020 carbon emission reductions target.”
The GBP1bn package is in addition to the GBP3.8bn investment Ofgem approved for the three electricity transmission companies to spend on network upgrades in their current price control. Ofgem will continue to assess the companies’ requests for funding for the remaining GBP764m of the GBP1bn package.
The GBP1bn package represents 20% of the transmission companies’ overall ten-year investment plan for network upgrades to connect new renewable generation to facilitate meeting the government’s 2020 carbon emissions target.
At this stage, Ofgem intends to allow GBP241m of construction funding on six specific projects planned to commence construction before the end of 2010/11. Out of this construction funding, 47% is to be directed at transmission reinforcement projects in Scotland, where developments in renewable generation are expected.
Ofgem also intends to allow GBP78m of pre-construction funding over the period April 2010 to end March 2012 to develop plans for 12 further projects (in addition to the GBP12.5m that it allowed in February 2009).
