CMA rejects generators’ appeal over transmission charges

The Competition and Markets Authority (CMA) has rejected an appeal from generators after Ofgem decided not to allow the generators to recover an extra £120 million in transmission charges from customers.

The generators had claimed that their network charges in 2015/16 exceeded €2.50/MWh, a limit set by the EU and sought a rebate. But Ofgem said some parts of the charge, relating to local networks connecting offshore wind farms to the grid, should be excluded from the cap and therefore the limit had not been breached. In November 2017 it refused the rebate.

SSE and EDF appealed to the CMA, which has now decided that - applying the correct approach to EU law – the local charges should be excluded, therefore there had not been a breach of the cap and Ofgem was entitled to reject the request.

Andrew Wright, senior partner at Ofgem, said: “It is good news for consumers that the CMA has upheld Ofgem’s decision. If the modification had gone ahead, it is likely that the rebate would have cost consumers up to £120 million and led to further payments to larger generators in the longer term.

“It is disappointing that SSE and EDF challenged our decision. The energy market is under close scrutiny and companies should be working hard to deliver a better deal for customers rather than seeking additional revenues that will add to customers’ bills.”