Business
National Grid responds to Ofgem
National Grid responds to Ofgem.
About this update from National Grid Plc
[{"type":"text","content":"\n \nRNS Number : 6277C National Grid PLC 23 January 2018 \n\n \n \n \n \n \n23 January 2018 \nNational Grid plc\n \nNational Grid responds to Ofgem's Hinkley Consultation\n \n \nOfgem today published their 'minded-to' consultation on the delivery model for the Hinkley-Seabank project (HSB), in which they propose the Competition Proxy model. \n \nWhilst we anticipated that the HSB consultation may include a lower range on cost of capital than RIIO-T1, since under the proxy competition the project would be financed on a standalone basis over 25 years, 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. 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.\n \nThese parameters do not, in our view, offer the level of returns that would allow sustainable investment in the UK energy sector needed to deliver good outcomes for both customers and investors.\n \nNational Grid intends to work constructively with Ofgem in the coming w...