Ofgem is planning changes to the way it charges power generators for using the high voltage transmission grid, it announced yesterday.
The plans could see charges for some Scottish power generators plummet up to 60% but others in the South may see small rises, says the industry regulator.
An Ofgem spokesperson admitted the changes will create some “winners and losers” but told ELN: “What we’re proposing we feel is fairer, bearing in mind this is about what it costs the consumers.”
At the moment, generators pay according to where they are located in the UK. Generators further away from areas of high electricity demand, for example some in the north of Scotland, have to pay more.
Ofgem says its proposals will now take into account the fact that different energy sources like wind farms may be closer to generators, as well as how often generators use the network to transmit power.
Hannah Nixon, Senior Partner for Transmission said: “The current formula was designed for a different era when Britain’s power all came from conventional sources like coal and gas.
“The charging formula needs to be updated to reflect the new realities of the generation mix. Renewable generators with a variable output are not using the networks continually.The formula needs to reflect this to ensure their charges are fairer.”
The watchdog had been considering applying @socialised charges’ – i.e. applying the same charge across the board, but says it decided against the ‘socialised charges’ route because this could have put more cost on the consumer. Overall transmission charges make up 4% of an average household power bill.