Dec 8, 2020
Ofgem reduces cuts to returns for UK energy networks
Britain's energy regulator will cut returns that large utilities such as National Grid and SSE can make by less than previously proposed as it seeks to defuse a row with electricity and gas network groups. Energy network companies will be permitted a baseline rate of return of 4.3 per cent from April 2021, Ofgem said on Tuesday. The network groups claimed that setting returns at that level for five years would undermine their ability to deliver reliable services and ensure that Britain's energy system could cope with the changes needed to deliver the government's 2050 net-zero emissions target. Customers are set to save £2.3bn on their bills over the five years, of which network charges typically account for a fifth. The regulator raised the spending package for investment to help deliver clean and reliable energy over the five years to £30bn, up from £25bn, with a further £10bn under consideration for future green energy projects, such as wind power farms.
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