Posted on: 29/11/2016
The energy industry regulator is reviewing whether National Grid should be paid £268.3 million for providing capacity at an entry point to the national high-pressure gas pipeline at Fleetwood in Lancashire.
National Grid Gas Transmission (NGGT), one of the group’s subsidiaries, was awarded the allowance under the “revenue equals incentives plus innovation plus outputs” (RIIO) price controls for 2013 to 2021.
The need for capacity arose following bids in the September 2006 quarterly system entry capacity auction by a gas shipper.
Ofgem said the gas shipper had since defaulted on payments and no longer has a right to the capacity.
Decision early in the summer
National Grid has since offered the entry capacity to other parties through auctions, and a gas shipper has successfully bid for some capacity at Fleetwood for one quarter in 2025.
Ofgem plans to run a consultation on its proposals in March 2017 and will make a final decision early in the summer.
The regulator said: “We will take account of stakeholder views on whether this entry capacity is still needed.”
> Read Ofgem's announcement