Ofgem’s £14m threat to energy firms unless service improves

THE energy regulator has fired a warning shot at the operators of Britain’s power grids as the energy system shifts towards flexible electricity use.

Ofgem threatened to slice their regulated revenues by almost £14m if they do not improve customer service, after a study revealed the companies are falling short of expectations.

Ofgem said connecting new energy innovations – such as solar power, battery storage and small-scale generation – is “an essential part” of the grid operators’ work, “especially as the energy system is rapidly becoming smarter and more flexible”.

Traditionally National Grid has shouldered the brunt of the work transmitting power from large power plants to distribution network operators (DNOS) that connect the power to customers via smaller regional grids. But DNOS, such as UK Power Networks and Northern Powergrid, are due to play a far larger role in managing the energy system in future. “For example, some customers struggled to get progress updates on their connection requests. In other cases the DNO failed to explain the cost of reinforcing its network when making quotations for connections work,” the watchdog said.

Ofgem will give a final decision by the end of November, after the companies

‘The smart grid transition has the potential to create a whole new range of market opportunities’

have had an opportunity respond to its concerns.

In the meantime the Energy Networks Association has launched a consultation on how to create a smart electricity grid.

“The smart grid transition has the potential to create a whole new range of market opportunities,” said David Smith, the group’s chief executive. to