Ofgem mulls rejection of National Grid JV penalty exemption request

(Sharecast News) - Britain's energy regulator Ofgem on Thursday said it was considering whether to reject a delay penalty exemption request for an electricity transmission joint venture between National Grid and SP Transmission. The Eastern Green Link 1 project, being constructed by Iberdrola's Scottish Power Energy Networks and National Grid Electricity Transmission, will build subsea and underground cables between Scotland and north-east England.

In a statement, Ofgem said the joint venture had asked for a 480-day exemption from penalties related to project completion delays, due to global supply chain issues and capacity shortages.

"We do not consider that the joint venture has demonstrated that there has been unavailability of equipment or capacity globally in supply chain," Ofgem said.

"The evidence provided by the JV, and our assessment of it, suggests that an 'error or failure on the licensee's part' as a result of its procurement strategy may have caused the delay. Further evidence provided by the JV also points to a misunderstanding of consenting requirements by one of its suppliers, which we are concerned may have caused the delay to project timescales."

Meanwhile, National Grid in a separate announcement, said the group was trading in line with expectations, consistent with guidance provided at half-year results.

Reporting by Frank Prenesti for Sharecast.com