Ofgem wants fair grid charges for all consumers

Solar rooftop. Author: David TREBOSC. License: Creative Commons, Attribution-NoDerivs 2.0 Generic.

November 30 (Renewables Now) - UK energy regulator Ofgem this week proposed reforms in electricity network charging aimed at ensuring that grid costs are shared fairly between all consumers, which, according to the Renewable Energy Association (REA), may hit small-scale renewables.

Under the current network charging system, residual charges for running the networks are calculated based on the amount of electricity consumers take from the grid. In the present situation, homes and businesses with own small-scale systems like solar arrays, avoid part of these charges even though they still use the grid. Other customers, on the other hand, pay more, Ofgem explains.

The regulator’s proposal is to introduce fixed residual charges for all households and businesses, instead of the current volume-based charges. It has launched a consultation on the topic in order to gather views on whether such changes should be implemented in 2021, or phased in between 2021 and 2023.

Ofgem is also proposing to remove some of the differences in charges for smaller and larger generators connected to the distribution network. It is asking for views whether such “embedded benefits” should be eliminated in 2020 or 2021.

“While our sector accepts the network must be paid for, these proposals would specifically hit homes and businesses which have installed on-site solar, wind, and other generation, as well as energy storage. This is clearly the exact opposite of what is needed to decarbonise and provide system flexibility,” said REA CEO Nina Skorupska.

“The regulator’s preferred option, to move away from consumption-based to fixed charges means that the most profligate energy users will be rewarded, while those who take action to effectively manage and reduce their electricity consumption are penalised. Under this option the hardest-hit sector will be the thousands of forward-thinking businesses across Britain who invest in storage and on-site generation,“ said Solar Trade Association CEO Chris Hewett.

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Browse all articles from Tsvetomira Tsanova

Tsvet has been following the development of the global renewable energy industry for almost nine years. She's got a soft spot for emerging markets.

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