Tuesday 15 October 2019 3:34 pm

Ofgem says it will cut National Grid's Hinkley Point C funding by £80m

Energy regulator Ofgem said today it would give National Grid £636m to build the transmission line for the Hinkley Point C nuclear plant, lower than the £717m requested by the company.

Ofgem said it rejected £40m in risk funding that National Grid has requested.

The regulator said National Grid may be able to seek extra funding for risks such as flooding or extreme weather if they take place during construction.

Read more: EDF warns Hinkley Point may overshoot budget by £3bn

Last month French energy company EDF said construction of the plan could cost up to £2.9bn more than its previous estimate and face further delays.

Ofgem said it had planned to use the new so-called competition proxy funding model to bankroll the link, but said updated analysis showed this may no longer give consumers the best savings possible.

Read more: Experts hail cheapest ever offshore wind farms

It now plans to use RIIO2, the next network price control for electricity transmission, which takes effect from March 2021 to 2026, to fund the investments.

“While we welcome Ofgem’s minded-to position not to proceed with the competition proxy model (CPM) for this project, we continue to question the value of the CPM,” National Grid said in a statement.

National Grid said it would look to provide further evidence to Ofgem to support its view of the capital costs for the Hinkley–Seabank project, meant to allow for the safe connection of the nuclear power station.