Since 2009 links to offshore wind farms have been competitively tendered, saving consumers between £200 million and £400 million so far.
Now OFGEM wants to apply this successful formula to new, high-value onshore electricity transmission infrastructure.
This means that the three monopoly transmission companies in Britain – National Grid, Scottish Hydro Electricity Transmission, and Scottish Power Transmission – will have to compete against other firms for the right to build and own new, high-value transmission assets.
OFGEM Chief Executive Dermot Nolan said: “Part of our role is to ensure that customers pay no more for energy infrastructure than they have to.
“We took a ground-breaking approach by opening up ownership of offshore links to competition and now we are going further. In future we will tender out high-value electricity infrastructure projects onshore. This ensures that customers get even better value for money from Britain’s grids.”
OFGEM video on how it regulates network costs and investment: