The UK's gas and power market regulator Ofgem has welcomed the government's energy review, published on July 11, but the country's principal network operator, National Grid, has cautioned that GBP1.4 billion will be required to connect a new fleet of nuclear plants.

I welcome the government’s restatement of its commitment to markets and effective independent regulation as the cornerstone of Britain’s energy policy to deliver secure, sustainable and affordable energy supplies for consumers. While we fully expected this, it is nonetheless fundamentally important for the challenges ahead, says Ofgem’s chairman, Sir John Mogg.

However, Ofgem added that action on a number of fronts will be needed if consumers are to become truly ‘energy smart’. The regulator believes that better ways to incentivize and tackle barriers to energy efficiency are required, as is an urgent examination of the potential for smarter metering and improvements in information and accuracy of energy bills.

Ofgem also stresses that the review must be seen in an international context, with the liberalization of European markets a central tenet of the review’s objectives.

Ofgem’s work in Europe will…be key. Through my chairmanship of EU regulators and membership of the [European] Commission’s High Level Group on Energy, Environment, and Competitiveness, Ofgem is well placed to contribute to and influence the debate, Mr Mogg says.

The investment needed to meet Britain’s future energy needs will continue to be reflected in higher prices for business and household consumers. Given this, I particularly welcome the commitment to explore ways to better target help to vulnerable consumers – this chimes with the ‘find and fix’ approach, which we have advocated and we look forward to continuing to play a key facilitative role.

Meanwhile, the Daily Telegraph newspaper reports that the National Grid, owner of the electricity transmission network in England and Wales, estimates that it will cost between GBP850 million and GBP1.4 billion to connect a new tranche of atomic plants to the existing transmission system. This assumes that the 11 nuclear stations scheduled to be decommissioned by 2023 are all replaced by new build. The government’s review has stated that a new nuclear program will be implemented, but the precise number of reactors to be built has yet to be determined.

National Grid apparently sees the investment as essential because the new generation of nuclear stations is likely to offer higher output than the existing plants.