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National Grid to pay energy customers £200m over next two years after trading electricity with Europe

By Press Association & Linda Howard

National Grid will share some of the excess cash it has made from electricity cables to Europe ahead of schedule as regulator Ofgem and others try to help keep bills pushed down.

The grid operator said it will pay £200 million to consumers over the next two years - the balance is normally settled every five years, but an unprecedented crisis in the energy markets meant the company and Ofgem thought it wise to make the payments earlier.

National Grid is not allowed to make more than a certain amount of money from its cables, so excess has to be paid back to consumers.

Jonathan Brearley, the chief executive of Ofgem, said: “This early payment of £200 million ensures consumers get value for money sooner from our regulatory framework.

"Our regulatory approach for interconnectors not only protects the interests of consumers, but it also promotes new investment in affordable, modern energy infrastructure."

He added: "We're now working at pace to ensure this money is returned to the consumer in the fastest and most impactful way."

National Grid boss, John Pettigrew, said: “While National Grid's impact on customer bills is relatively small, we strive every day to keep our costs as low as possible.

"Given how challenging the current rise in overall energy costs is for people across the country, we want to play our part in helping reduce consumer bills."

The cash comes from cables that connect France, Belgium and Norway with the British power grid.

It means that when French electricity generators produce more than their customers can use, they can sell their excess to households in Britain.

Meanwhile, when British wind turbines spin more than British households have use for, that gets sold back to the French.

To keep up to date with the energy crisis, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.

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Dive Deeper:
National Grid to use subsea cable cash to help struggling energy users
Under agreement with Ofgem, network operator will return electricity funds early
Energy boss warns families another hike in bills is on its way
Surging prices have already left many householders struggling with a choice of heat or eat
Ofgem boss: Energy costs are ‘matter of life and death’ for some people
Speaking in Glasgow, Jonathan Brearley, the CEO of the industry regulator, said the gas supply crisis was ‘unprecedented’.
Ofgem boss warns of ANOTHER energy bill hike amid £3,000-a-year war
The news comes as a report has revealed 1.5 million UK households will struggle to pay food and energy bills…
One subscription that gives you access to news from hundreds of sites
Energy bills set to be capped after 2023 to protect millions of households
Current UK Government legislation is set to run out next year.
Ofgem boss warns Scottish households of new energy bill rise this year
Speaking in Glasgow, the chief executive of energy regulator Ofgem warned households that they should prepare for another surge in…
Get all your news in one place