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Ofgem calls for grid down payments that could benefit cheap energy projects - 05/11/2009

People looking to switch energy companies may be encouraged by news that industry regulator Ofgem is calling for energy firms to make initial payments towards grid upgrades.

SP Transmission, National Grid Electricity Transmission and Scottish Hydro-Electric Transmission are being called upon to invest a combined £1 billion in grid upgrades over the next two years in order to help more renewable energy projects contribute to the national grid.

The three companies have already set out plans to invest £5 billion over the next ten years, but Ofgem is keen for the initial 20 per cent as a down payment of sorts.

Alistair Buchanan, chief executive of Ofgem, said: "This is needed urgently to handle growth in wind power and other renewable generation that is arising from Britain's drive to curb climate change emissions."

While the regulator wants £1 billion of investment over the next two years, the remaining £4 billion will not be sought until after 2012.

Many wind farms and other renewable projects built in remote regions of the UK are unable to connect to the grid due to a lack of necessary infrastructure.

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