Responding to the report by Citizens Advice, a spokesperson for Energy Networks Association, representing the GB’s electricity networks, said:
"Great Britain has one of the most reliable grids in the world, delivering power to 28 million customers, supporting 26,000 jobs and 1,500 apprenticeships and trainees. Today, running and upgrading the electricity networks costs about 48p per day on the average bill.
“Citizens Advice's analysis is overly simplistic and looks at a narrow three-year period, ignoring the longer investment timeline and the balance of returns across a five-year period. Electricity networks are bringing in private investment of more than £100bn between 2021 and 2031, investing in our grid to promote growth in our economy. It's crucial to keep the regulatory environment stable during this time."
Notes to editor
- Ofgem looked at this concern previously and found that reopening the price control due to inflation would not benefit consumers because it would increase financing costs due to regulatory instability.
- Network company financial performance needs to be viewed across the entirety of the price control, not just selective years. Ofgem measures this as RoRE (Return on Regulated Equity). For further background, please see Frontier Economics’ analysis from 2022 of how energy networks are funded.
- As highlighted in Citizens Advice’s report (Fig 35), RoRE in Electricity Distribution is forecast to drop sharply from 2025 to 2028, falling to levels well below the RIIO-ED1 average and in Electricity Transmission (Fig 15), average RoRE across the RIIO-T2 period is forecast to be lower than in RIIO-T1.
£100bn breakdown:
- RIIO-ET2 (2021-2026) forecast expenditure and investment of £11bn.
- RIIO-ED2 (2023-2028) forecast expenditure and investment of £22bn.
- RIIO-ET3 (2026-2031) operators have submitted plans totalling £68bn, which is subject to regulatory approval. This is set out in the transmission network operators' business plans (National Grid - £35.1bn, SP Energy Networks - £10.6bn, and Scottish & Southern Electricity Networks (Transmission) - £22.3bn+).
- Proposals for the equivalent price control period for RIIO-ED3 have not yet been submitted, but will take the total investment over £100bn.
About us
Energy Networks Association (ENA) is the industry body representing the energy networks. Our members include every major electricity network operator in the UK. The electricity networks are at the heart of the energy transition. They directly employ more than 26,000 people in the UK, including 1,500 apprentices. They are spending and investing £33bn in our electricity grids over the coming years, to ensure safe, reliable and secure energy supplies for the millions of homes and businesses reliant on power every day.
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