The energy regulator has reduced the amount National Grid can spend on running the high voltage electricity grid and high pressure gas main by £185 million.

Ofgem’s decision followed its mid-period review of the 2013 to 2021 energy transmission price controls.

The final changes to the allowances consist of:

  • a £168.8m reduction in the high-pressure gas pipeline price control allowances because the proposed Avonmouth gas pipelines are no longer needed;
  • a £38.1m cut to the high-voltage electricity grid price control allowance because less fault protection work is needed as fewer generators are connecting to the grid;
  • and a £21.5m increase in system operation, including providing more balancing services.

The changes will take effect from April 2018.

Further gas consultation

Ofgem has also launched a consultation into further changes to the price control allowances of transmission and gas distribution companies.

The consultation includes proposals to reduce National Grid Gas Distribution’s allowances by £54m.

The proposed cut has been prompted because some work on its medium-pressure gas mains will not be delivered in this price control period.

> Read Ofgem's decision