National Grid "very disappointed" with Ofgem Hinkley consultation
Source - SMW
National Grid said it was "very disappointed" by the UK energy regulator Ofgem's costing and pricing model for the Hinkley-Seabank transmission project.
The project is intended to allow for the safe connection of the planned Hinkley Point C nuclear power station to the grid.
"National Grid is very disappointed with the proxy competition proposal, which includes financial parameters proposed for the delivery of this complex and major infrastructure project," the company said.
"We have prepared for a number of financial scenarios, however we do not believe that the proposed ranges for cost-of-debt and cost-of-equity included in the consultation reflect either the actual cost of financing this project or the risk being taken for construction of this complex project."
"We also believe that Ofgem has significantly overestimated the potential consumer savings in their consultation."
National Grid said it intended to work constructively with Ofgem in the coming weeks and would submit its views to progress towards achieving "a fair and timely outcome for customers and investors".
However, the company said it would consider "all other options available to us if we are not able to progress this satisfactorily".
The HSB project was expected to have a total cost of around £650m, with the majority forecast spend by National Grid Electricity Transmission plc in the RIIO-T2 price control period from April 2021 onwards.