Britain’s energy regulator Ofgem announced last week a new investment package worth £17 billion that aims to maintain the electricity network and connect small-scale renewable energy generation to the electricity grid.
The plans are for five out of the six companies that run Britain’s local electricity network, and the expectation is for those companies to meet tough targets to improve their reliability, customer service, connections, and their work with vulnerable consumers.
Early drafts from July have seen very little change, and the final announcement represents a reduction of £2.1 billion since Ofgem sent back initial business plans in November.
“Today’s plans represent good value for consumers,” said Dermot Nolan, chief executive at Ofgem. “There will be significant investment in Britain’s electricity network, and reduced pressure on bills. Ofgem expects network companies to step up and take a more visible and active role in helping customers, particularly the most vulnerable.”
Ofgem’s statement notes that consumers will be able to expect an average annual saving of £11 a year. Furthermore, the companies are expected to realise approximately £900 million of benefits to customers over the period. In conjunction with price controls already agreed with the sixth company, Western Power Distribution, which reached a deal early, the total spent on Britain’s local electricity network over the next eight years is expected to reach £24 billion.
Due to Britain’s current energy setup, network companies are natural monopolies, and therefore these price controls limit the revenue these companies can collect from consumers. Below is an infographic provided byOfgem which outlines how the price control on network companies will affect residents across Britain.
The full infographic is available at Ofgem’s website.