At Ofgem, we ensure funding is justified

Your article (Scottish Power blames Ofgem ‘disconnect’ for stalling electric vehicle rollout, 19 October) does not fully reflect Ofgem’s position. Our statutory duty is to protect consumers now and in the future. We do this by helping to deliver, as one of our core priorities, a net-zero-emissions economy by 2050 at the lowest cost to consumers. This includes prioritising electric vehicle rollout.

We’ve already made sure that networks have £3bn of funding to reinforce their local grids, including to accommodate low-carbon demand for electric vehicles.

Additionally, if companies develop innovations that they can prove help drive forward decarbonisation then we make sure that funding is available. This includes providing £15m towards Electricity North West’s Smart Street project, which uses voltage control techniques to make customers’ appliances perform more efficiently and makes it easier for the electricity network to adopt low-carbon technology.

However, we can only allow consumers to foot the bill for these requests for millions of pounds of extra funding where it is properly evidenced. Companies must robustly justify each pound of consumers’ money that they spend. It is our duty to make sure they do.

We disallowed the recent request from Scottish Power because they simply did not justify the costs of their proposal to us. They didn’t give us basic evidence, for example, about where the investment will take place, how much extra capacity will be provided or how it will be used by future electric vehicle users. Our decision explains this in more detail and can be viewed on our website.

Scottish Power and other network companies can make the case next year for further funding which we will consider.
Akshay Kaul
Director, network price controls, Ofgem

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