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Ofgem has approved a request by National Grid for £124 million of funding for two IT projects relating to the potential creation of a new electricity transmission control centre.
As the wider project is considered as critical national infrastructure, the regulator has redacted the names of the two sub-projects but revealed it had decided to increase National Grid Electricity Transmission’s spending allowances by almost £4.2 million for the first and almost £120 million for the second.
National Grid requested the funding through a re-opener mechanism in the RIIO T2 price controls for non-operational IT capital expenditure.
Ofgem made the funding decisions in December and January respectively after issuing confidential consultations in July and September. The regulator has not yet taken a view on whether to approve the wider project.
If the wider project goes ahead, National Grid said it will need to begin major procurement activity in October 2023 to keep to scheduled and therefore asked the regulator to conduct an initial assessment sub-projects ahead of this date.
Ofgem has also decided to add a new reopener window between 26 and 30 June to allow for its assessment of the control centre project.
A spokesperson for National Grid said: “These projects form part of our significant investment in our people, capability and infrastructure, ensuring we are able to deliver the transmission network needed for net zero. We welcome Ofgem’s direction and will continue to work with them as each project progresses.”
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