Ofgem holds back on implementation of targeted charging review

Ofgem has set back plans to alter some aspects of the charging regime, including that for distribution-connected (‘embedded’) generation.

The regulator now expects to implement three aspects of its ‘targeted charging review’ (TCR) at the latest of the range of potential dates initially proposed, to allow more time for industry consultation.

  • On reforming embedded benefits arrangements, it has ruled out making changes in April 2020  in favour of implementation in April 2021.
  • On new residual charging arrangements, it may delay implementation until April 2023, although it has retained the options of April 2021 or phasing between 2021 and 2023. 
  • On access reform, it will target implementation of changes, across transmission and distribution, and across access and forward- looking charges, on 1 April 2023 instesd of April 2022. This is also the start of the distribution network operators’ next five-year price control period.

 

The regulator  will publish a working paper in summer on the potential changes to access rights, distribution network charges and transmission demand network charges. A second paper later in the year will focus on other specific changes to transmission network charges, distribution connection charges and access and charging arrangements for small users.

Read the regulator’s letter here

Further reading

Ofgem to go ahead with Triad benefit cuts, plans three-year phase-in

Briefing: behind the embedded benefits discussion

Gas engines ‘could be transplanted overseas’ despite Capacity Market penalties if Triad benefits are not grandfathered

Smart energy suffers a ‘big blow’: industry responds to Ofgem’s Triad proposals

Ofgem ‘minded to’ cut payments to embedded generators

Distributed generation needs investor confidence as much as central generation does

 

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