UK Risks Blackouts Warns Grid Operator

The UK’s National Grid said on Monday that proposed new rules of energy company investments in the networks reduce the reliability and resilience of the electricity supply in the United Kingdom.

In July, the regulator Ofgem proposed new rules about how the country’s energy networks should work over the next five years under a new investment program.

Ofgem is proposing to cut more than US$10.5 billion (8 billion British pounds) from the spending plans of the companies “by setting them stretching efficiency targets and disallowing costs that companies have simply not justified as delivering value for money for consumers.”

In response to the regulator’s proposal, National Grid said that “The proposals also risk disrupting our supply chain, inhibiting our ability to maintain resilient and reliable networks and endangering the critical investment required to put the UK on the path to meet net zero targets.’’

The draft proposal “fails to meet the needs of our customers and stakeholders and is not in the interests of current and future consumers,” National Grid said in its comments.

According to the grid operator, the proposal for spending cuts reduces the reliability and resilience of the UK’s electricity supply, jeopardizes the pace of progress towards a net-zero energy system, and erodes regulatory stability and investor confidence in the sector.

National Grid is concerned that the new plan from the regulator could reduce “the ability to avoid power cuts in serious weather events, regional impacts associated with specific rejected investments, and higher costs in the future.”

“In bad weather it could mean that overhead lines aren’t resilient and will struggle to stay in place - that’s a real worry,” Nicola Shaw, executive director for the UK at National Grid, told Bloomberg in an interview.

The regulator Ofgem is expected to announce its final decision in December this year.

By Charles Kennedy for Oilprice.com

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