National Grid Gas Transmission overspending on data centres
National Grid Gas Transmission is forecast to overspend the totex allowance for its system operator role by £177.5 million by 2021 due to increased spending on data centres and cyber security.
6th April 2016 by Networks
According to the annual report released by Ofgem on National Grid Gas Transmission’s (NGGT’s) progress in the second year of the current RIIO price control, the gas system operator (SO) has accrued £80.3 million totex expenditure for the period 2014-15, above its allowance of £78.7 million.
NGGT’s eight-year SO totex allowance is £559 million, but its forecast totex expenditure is £736.5 million for the period.
NGGT said this increase in spending is dependent on the level of additional investment required to deliver its data centres, £54 million, and cyber security at £4 million.
Ofgem provided NGGT with over £35 million at final proposals for its data centres programme for necessary refurbishments and upgrades to its data centres. It said National Grid did not provide sufficient justification for its preferred solution of constructing new data centres.
However NGGT may apply at the 2018 reopener window for additional funding for the new data centres.
It is currently consulting with the Department of Energy and Climate Change (DECC) to ascertain what levels of cyber security will be necessary.
NGGT’s eight-year SO capex forecast indicates that NGGT will overspend on its allowances, spending £293.5 million against an allowance of £193.8 million.
Login on register to comment
Cadent backs launch of major bio-CNG HGV refuelling station
Gas network’s £250,000 infrastructure investment ensures supplies to existing connected customers have not been impacted
Editor’s blog: The biggest tests of resilience are yet to come
Network content director Jane Gray reflects on the industry's coronavirus response to date and the challenges still to come.
From the front line: Chris Garside and Andy Simcoe, Northern Gas Networks
Key workers across the power and gas networks are playing a critical role in the national response to Coronavirus. Network has committed to profiling their stories.
Related supplier content
Zero Harm supplement
'31.2 million working days were lost to work-related illness and workplace injury between 2016 and 2017' *(Health and Safety Executive)
Network explains heat networks
Commonplace in Europe and gaining in popularity here
Network media information and marketing options
Network is the first and only magazine dedicated to engineering leaders in the UK's gas