National Grid calls for Ofgem to go further with price determination

(Sharecast News) - National Grid urged Ofgem to make significant changes to its RIIO-ET3 draft determination on Wednesday, saying it wanted to ensure the next price control delivered the scale of investment needed for Britain's electricity transmission network. The FTSE 100 company said it welcomed Ofgem's "continued positive intent" in designing the framework, including its commitment to an £80bn investment plan, the recognition of the urgency in delivering new infrastructure, and improvements to the financial package since the sector-specific methodology decision.

However, National Grid said the current draft "does not sufficiently recognise the practical realities of delivering the biggest expansion of the electricity system in more than a generation" or the need for a two-and-a-half-fold increase in transmission investment.

The energy transmission network operator called for the final determination, due in December, to produce a framework that is both "investable" and "workable."

It said changes were required to the baseline return and incentives framework to ensure a globally competitive return for high-performing networks, while a simpler suite of funding mechanisms and more efficient reopener processes were needed to accelerate project delivery.

"Both investability and workability are necessary for transmission owners to be able to meet the commitments put forward in their business plans including accelerating the decarbonisation of the energy system, and cost savings for consumers," National Grid said.

The company added it would continue to engage with Ofgem "at all levels" to agree a price control capable of attracting the investment required for a "reliable and affordable flow of clean electricity" and to meet the growing demand for power.

At 0849 BST, shares in National Grid were up 1.95% at 1,067.37p.

Reporting by Josh White for Sharecast.com.