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Ofgem approves £64 million in DNO funding requests

Image: Ofgem

Image: Ofgem

Ofgem will allow £64 million of additional funding requests from distribution network operators (DNOs) for rail electrification, street works and site security.

Around £258 million was rejected, in cases the regulator considered the funding wasn’t justified or provided poor value for money.

DNOs submitted 12 requests for funding during the May 2019 window under the RIIO-1 price controls, which allow for additional funding to be granted to cover significant and additional costs that had not been forecast when the price controls were set.

Ofgem has approved £45 million for street works, requested by Electricity North West, Northern Powergrid (NPg), SP Energy Networks (SPEN), UK Power Networks and Western Power Distribution.

Another £16 million has been approved for Scottish and Southern Energy Networks (SSEN) for diversions required to facilitate the electrification of the Great Western Railway line.

NPg has also seen its request for £3 million to invest in sites that need physical security upgrades approved.

However, four requests have been refused by the regulator, including £42 million for SPEN to increase network capacity in anticipation of the uptake of electric vehicles.

SPEN's £70 million request was also rejected, which would have gone towards cable repairs. There wasn’t justification for the level of investment requested, Ofgem said.

Funding totaling £30 million was denied for SSEN to replace cables at Pentland Firth East, as the DNO hadn’t "demonstrated that the proposed solution is economic and efficient," Ofgem said.

Finally, £67 million in other street works funding requests were rejected.

Ofgem’s decision on the funding comes after a consultation on the requests, which closed on 30 August. It proposed to approve £75 million of funding, which has since fallen in the finalised decision to £64 million.

Respondents to the consultation include each of the DNOs, as well as Citizens Advice and Centrica.

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