Ofgem removes National Grid funding allowance
Ofgem said on Friday that it has removed £277.5m of funding from National Grid’s price control allowance as the company does not expect to incur further expenditure on providing the capacity during its current price control.
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The funding had been for new pipelines and other network upgrades needed to provide capacity at the Fleetwood entry point to the national transmission system, a high-pressure gas pipeline.
National Grid’s obligation to provide this capacity was triggered by bids in the September 2006 auction for NTS entry capacity. However, the gas shipper that bought the capacity has since defaulted on payments and no longer has a right to it.
Since then, National Grid has offered the entry capacity at auctions to other parties and a gas shipper has successfully bid for some capacity at Fleetwood for one quarter in 2025.
The energy regulator also said it has decided to reduce National Grid’s obligation to provide capacity at Fleetwood from 650 gigawatt hours per day to 350 GWh/day.