Industry groups urge review of charging reforms
The Informer

A group of renewable industry bodies have joined forces to condemn Ofgem’s proposed changes to network charging.

The energy regulator is consulting on its Targeted Charging Review into how charges for network infrastructure are distributed.

Six trade bodies – the Association for Decentralised Energy, the British Electrotechnical & Allied Manufacturers’ Association (BEAMA), RenewableUK, the Renewable Energy Association (REA), the Solar Trade Association (STA) and Tech UK – have written to Energy Secretary Greg Clark calling on him to review the whole process of network charging reform.

The six bodies said that if the proposals are implemented, they will undermine progress towards a more flexible, low-carbon energy system.

“Consumers who have made considerable effort to curb their energy use and environmental impact through onsite generation or energy efficiency measures face increased charges, while profligate users would see their charges reduce,” they said in a joint letter.

‘Cannot be fair’

Ofgem wants to spread the cost of network infrastructure via fixed charges, instead of the current system relating to electricity consumption.

Chris Hewett, Chief Executive at the STA, said: “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.”

Higher costs

The STA said Ofgem’s figures showed there could be a five-fold cost increase for those in the commercial sector using solar and storage.

In their response to Ofgem’s consultation, the Electricity Storage Network (ESN) and advisory firm Regen also warned: “Renewable generation, storage and flexible technologies are disproportionately affected."

“By removing incentives to reduce demand and increasing balancing system charges for distribution connected assets, these reforms will result in higher costs, greater uncertainty and decreased deployment.”

Regen calculates that the cost for a typical renewable generator could rise by £4-5/MWh.

The firm added that incentives for onsite generation could plummet by as much as 96%.

> Read the letter here