REVOLT opposing unnecessary, excessive and intrusive powerline development

opposing unnecessary, excessive
and intrusive powerline development

REVOLT Newsletter 357

Revolt news 4/08/2012 Print (pdf) Version

1. On 27 July Ofgem issued "initial proposals" on the next price-control for National Grid. A 55-page overview document "sets out our Initial Proposals for the transmission price controls for National Grid Electricity Transmission (NGET) and National Grid Gas (NGGT) from 1 April 2013 to 31 March 2021. This is the first transmission price control to reflect the new RIIO (Revenue = Incentives + Innovation + Outputs) model. Under RIIO we are adopting a very different process for setting price controls. Companies are required to develop and submit well-justified business plans, supported by the views of stakeholders, setting out what they will deliver. Those plans inform the setting of the price control components."

2. A key question will be: will Ofgem approve costs of undergrounding, given NG’s new Approach? In the past, regulators have generally allowed transmission companies to pass on the costs of burying powerlines, through the price control, only when burial was forced by a planning refusal for an overhead line (with possible exceptions for special reasons).

3. Ofgem’s document offers "a package of measures to encourage NGET and NGGT to innovate to drive improved outcomes for consumers" noting "Overall, our proposals result in an increase in allowed revenues for NGET by around 25 per cent". That implies an increase of about £4 on the average annual household electricity bill.

4. Regarding Scotland, the overview document says "We published Final Proposals for SPTL and SHETL in April 2012. However, in relation to customer satisfaction, network availability and visual amenity we are providing updates that are also relevant for both SPTL and SHETL. These are discussed in further detail in the Outputs, incentives and innovation Supporting Document." Too late for Beauly-Denny!

5. Table 2.1 of Ofgem’s overview document sets out what NG is to deliver as outputs and lists corresponding incentives. Disappointingly, "Safety" is minimised to bare compliance with obligations set by the HSE, so EMF issues look to be sidestepped, and there is no associated financial incentive (see also news350.9). Environmental outputs include carbon footprint and losses, as well as "Visual amenity – to efficiently meet planning requirements for new infrastructure and deliver visual amenity outputs by mitigating impacts of existing infrastructure when it is located in designated areas".

6. The incentive for visual amenity is stated as "Baseline funding for additional cost of mitigation technologies required for development consent. Initial expenditure cap of £100m to reduce the impact of existing infrastructure in designated areas." As stated that is restricted to what is "required" for development consent (not quite the same thing as results of planning decisions) or else capped mitigation in designated areas (that is a reduction on current policy). Not very encouraging!

7. Whereas NG, on the basis of public Willingness-to-Pay analysis, had proposed a cap of £1.1 billion over 2013 to 2021 (the price control period) for mitigating existing lines in designated areas (National Parks and AONBs), Ofgem now proposes (subject to review) to reduce that to £100 million. Quite discouraging!

8. On a (possibly) brighter note, section 2.13 says: "We propose to adopt NGET?s proposition for a baseline allowance to deploy undergrounding technologies that is equivalent 10 per cent of the new transmission lines proposed for delivery in RIIO-T1. We recognise that this baseline amount could be too large or too little and is a working assumption only for the purpose of setting the price control. Therefore, we also propose to include a volume driver to adjust NGET?s revenues for the level of mitigation technologies that is actually needed over the course of the price control to obtain development consent." There Ofgem gives some documentary reference for the 10% idea, worth noting! At the same time beware the possible interpretations of "actually needed"!

9. As we said before (rather often - news339.7, 350, 353, 354), the proof of the pudding is yet to come. (Delightfully, use of the word "pudding" seems to have precipitated discreet on-site google ads for pudding recipes!) Changes are happening at policy level and are manifest in NG’s proposed undergrounding for part of Bramford-Twinstead and statements on mid-Wales, as well as in Ofgem’s policy for existing lines in National Parks and AONBs (news350.5). Real implementation of such change for high-voltage lines remains to be demonstrated, notwithstanding the low-voltage line improvements in some National Parks.

Statements made by the editor or by other parties and quoted for information do not necessarily represent the views of Revolt. Criticism of government and industry, and grievances from members of the public, are in the nature of Revolt's work, though we try to give credit where it is due. Revolt is strictly non-party-political and regrets any offence which may be inadvertently caused.




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