Page 7 - Gi_October2021

industry & government news

UK ENERGY REGULATOR CMA BACKS MOVE TO SLASH RETURNS
LAUNCHES £450M GRID FOR ENERGY NETWORK INVESTORS
INNOVATION FUND

BRITISH ENERGY REGULATOR
Ofgem will offer £450 million in
funding over the next five years to
promote green innovation across gas
and electricity networks and keep
energy bills low, reports Reuters.
The money will be available
to network companies, system
operators, businesses and
researchers to drive “big, bold and
ambitious” ideas that accelerate
the transition to an emissions-free
energy system and help position
Britain as a world leader in energy
innovation, Ofgem said.
Funding could be increased if
needed, it added.
“What we need more than ever to
reduce greenhouse gas emissions
and reach net zero is innovation,”
Jonathan Brearley, Chief Executive
of Ofgem, said.
Ideas should have the potential to
scale across the networks and focus
on system integration, data and JONATHAN BREARLEY, OFGEM CEO
digitalisation, heat and transport,
such as heat pump roll-outs, or new THE UK COMPETITION regulator has and look forward to working with the
technologies to integrate flexible backed a move by Ofgem to slash returns industry to deliver efficient investment
energy solutions, such as battery for investors in monopoly energy which will benefit both consumers and
storage, Ofgem said. networks in Britain, despite appeals the planet,” Brearley added.
“The Strategic Innovation Fund from companies including National Grid, Ofgem and energy networks have
will ensure the best projects and ScottishPower, SSE and Cadent. been locked in a bitter battle since last
most talented minds have the The Financial Times reports that the year over the returns that can be made
grants available to reduce carbon Competition and Markets Authority by companies that own Britain’s national
emissions and enable bill payers will uphold the energy regulator’s electricity and gas infrastructure, as well
to see the benefits of building back decision to cut returns for investors as local gas networks.
greener,” said Martin Callanan, in companies that owned critical gas The regulator took an axe to returns
Energy Minister at the Department and electricity infrastructure almost 40 following complaints from consumer
for Business, Energy and Industrial per cent from April this year, the main groups, in particular Citizens Advice,
strategy (BEIS). point of contention. that the monopolies had been allowed
However, the CMA ruled in favour to make “eye-watering” profits at the
of the companies in certain technical expense of households under a previous
areas regarding what they could pricing regime in effect since 2013.
charge consumers. But the networks argued that a harsh
All the energy networks affected by crackdown would threaten their ability
the regime, which was finalised by to deliver reliable services and ensure
Ofgem in December and runs until the energy system could cope with the
2026, had appealed to the CMA on changes required to meet the UK’s 2050
various grounds. net zero emissions target.
Ofgem Chief Executive Jonathan David Smith, Chief Executive at
Brearley welcomed the CMA’s Energy Networks Association said the
provisional ruling as an “important group would “review in detail” the
first step” towards the regulator’s goal CMA’s provisional findings.
of “keeping bills as low as possible National Grid, which was among the
for customers while supporting nine companies to appeal, said it was
investment to net zero greenhouse gas “disappointed” the CMA had not found
emissions”. A final ruling is expected in favour of the networks on the issue
before the end of October. of returns, although it welcomed the
OFGEM IS SEEKING BIG,
BOLD AND AMBITIOUS IDEAS “We will continue to engage with the ruling on some of the more technical
CMA to finalise these price controls aspects of the new pricing regime.

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16/09/2021 11:05
News.indd 2
News.indd 2 16/09/2021 11:05