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Finance & Investment This week Mid-point review hits Grid for £277.5m Mid-point review could see NGGT lose licence obligation for capacity provision at Fleetwood Ofgem plans to claw back £277.5 million from National Grid Gas Transmission's (NGGT's) RIIO-GT1 allowance. The proposal comes as part of the mid-point review within NGGT's eight-year price control. Ofgem last week said the reduction should be made because NGGT no longer needs to provide capacity for importing gas into the national high- pressure gas pipeline at the Fleetwood entry point in Lancashire. The regulator explained: "NGGT's obligation to provide this capacity was originally triggered by a gas shipper which bid for the capacity in an auction. How- ever, the shipper has since defaulted on payments and no longer has a right to the capacity." Ofgem said NGGT's allowance should therefore be reduced, "otherwise customers will be charged for investment that has not been delivered". Ofgem also said it wants to remove NGGT's obligation to provide capacity at Fleetwood altogether. The regulator said such a change would mean "consumers would be better protected against the risk of paying for expensive network investment which is not needed". Ofgem has launched a consultation on this proposal – and the suggested reduction in NGGT's allowance – which interested parties must respond to by 26 May. JG HEAT Heat subsidies could unlock £22bn in investment Supporting heat networks with low-carbon subsidies and a new regulatory framework could unlock nearly £22 billion of pri- vate sector investment between now and 2030, the Institute for Public Policy Research (IPPR) has claimed. As large-scale infrastructure projects, which are inherently local, heat networks are "well- suited" to the government's new industrial strategy, the think- tank argued in a new report. The headline figure is based on the Committee on Climate Change's most ambitious route to meeting Britain's 2050 target of reducing emissions by 80 per cent on 1990 levels. This "max scenario" envisions heat networks generating 54TWh of heat each year by 2030. In order to secure invest- ment in heat networks, IPPR urged government to expand the resource of the Heat Networks Delivery Unit to allow it to map potential sites for heat networks in greater detail and keep records of their performance. GAS Grid completes sale of GDN stake National Grid has completed the sale of a 61 per cent share in its gas distribution business to a consortium of international investors. National Grid Gas Distri- bution consists of four gas networks in north London, the east and northwest of England and the west Midlands. They together serve roughly half of all connected households in the UK. The deal, which was announced in December, values the business at £13.8 billion, including debt. National Grid has been paid £3.8 billion in cash and will get a further a £1.8 billion through debt financing. It has pledged to return £4 billion of the proceeds to shareholders. WATER Water Plus wins £650k supply deal Water Plus has signed a deal worth £650,000 a year with vehi- cle servicing chain Kwik Fit to supply water to all 831 of its sites in Scotland and England. The deal covers Kwik Fit and Stapleton's Tyre Services sites, owned by parent company Euro- pean Tyre Enterprises. The figure includes 83 sites in Scotland and 748 sites in England. It is thought to have been the largest switch by number of sites for any water retailer prior to the water market in England open- ing to competition on 1 April. Water Plus is a joint venture formed last year between Severn Trent and United Utilities. Gas shipper defaulted on capacity won at auction Stock watch Toshiba shares shed nearly 10 per cent of their value on Tuesday aer Engie revealed plans to offload its 40 per cent stake in the Moorside nuclear project to the Japanese conglomerate for around £110 million. Under the terms of an agreement between the two companies, Engie is entitled to sell the whole of its interest to Toshiba in the event of a default. The French firm decided to exercise that right aer Toshiba's US nuclear arm Westinghouse filed for bankruptcy protection. Shares in Toshiba began the day of the announcement trading at around ¥228 and had plummeted to ¥207 by the time Utility Week went to press. TOSHIBA SHARE PRICE, FIVE DAYS 250 240 230 220 210 200 30 Mar 31 Mar 3 April ¥ 4 April