Energy trade associations from the decentralised and decarbonised renewables sector have warned the government that Ofgem’s charging reforms are putting at risk a more flexible, low-carbon energy system.
In a letter to secretary of state Greg Clark MP the ADE, Beama, TechUK, th eREA, the Solar Trades Association and RenewableUK warn that Ofgem’s decisions on charging reform are “contradictory to government’s ambition to decarbonise the energy system and create a market for flexibility.”
STA chief executive Chris Hewett said, “Ofgem’s proposals fail their own fairness test . We cannot see how it can be fair that the single occupant of a small flat should pay the same contribution to recovering network costs as a family living in a mansion. And when it comes to the vital issue of carbon, unfortunately once again we are seeing policy penalise companies who have done everything government has asked of them to reduce their energy use and to invest in smart technologies, like solar and storage. Furthermore, the timing of these changes is totally out of sync with any rewards for ‘smart’ energy use, creating uncertainty for everyone in this important market, and damaging the year-on-year business case.”
The letter recognises Ofgem’s attempt to level the playing and provide effective charging signals.But it says “Decoupling the targeted charging review from the forward-looking review leaves a big gap in the market, which is very destabilising for our industries. Further, the proposal to extend Generation BSUoS to distributed generation is unexpected ..
“The inability for industry to respond will be exacerbated by implementing it in April 2020 – leaving industry less than a year from the final decision.”
The groups called for “urgent action to review all elements of the charging system and implement these changes at the same time”, providing market certainty for investors.