Funding for capacity at Fleetwood is removed

RNS Number : 0862N
04 August 2017

4 August 2017

Ofgem removes £277.5 million funding from National Grid's gas transmission price control allowances

Ofgem is removing £277.5 million funding from National Grid's price control allowance. This was for new pipelines and other network upgrades needed to provide capacity at the Fleetwood entry point to the national transmission system (NTS), a high-pressure gas pipeline.

Ofgem said at the start of the price control that it would review the Fleetwood funding arrangements to ensure that consumers are protected.

Ofgem launched the review in November 2016: https://www.ofgem.gov.uk/system/files/docs/2017/03/fleetwood_consultation_letter.pdf

National Grid's obligation to provide this capacity was originally 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. National Grid has since 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.

Ofgem has decided to remove the £277.5 million funding as National Grid does not expect to incur further expenditure on providing the capacity during its current price control (2013-2021).

Ofgem has also decided to reduce National Grid's obligation to provide capacity at Fleetwood from 650 gigawatt hours (GWh) per day to 350 GWh/day.



Notes to editors

A link to the decision document is on this page: https://www.ofgem.gov.uk/publications-and-updates/review-fleetwood-entry-point-gas-transmission


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About Ofgem

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