Over the next five years they will be able to invest up to GBP7.2bn in the upgrading their networks. This includes a GBP500m sustainability fund allowing them to undertake large-scale trials of smart grids and other technology required in a low carbon economy.
The impact on household electricity bills will be an increase of GBP4.3 per year on average across the country. The new price control will run from April 1 until March 31, 2015.
Steve Smith, senior partner of Local Grids and RPI-X@20, said: ”We have set a tough but fair price control for the companies so they can invest to maintain high performance and adapt their networks to the low-carbon economy. The package will be delivered at a fair price to consumers who will benefit from improved service.”
Ofgem’s focus on sustainable development as a key part of the price control package has been welcomed by the Sustainable Development Commission(SDC). It said that the price control provides an example of how existing policy frameworks can be adjusted to deliver the transition to a low carbon economy in the short-term, pending the conclusions of their more fundamental, ongoing review of the approach to network regulation under the RPI-X@20 project.
The SDC noted that following its 2007 report on Ofgem, progress has been made in all the areas it identified to give the energy sector more incentives to reduce greenhouse gas emissions.
