Trade associations condemn extra charges

A group representing electricity producers in the UK has warned regulator Ofgem that changing generation charges will damage investor confidence in the market. Ofgem has proposed to charge all distribution […]

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By Tom Gibson

A group representing electricity producers in the UK has warned regulator Ofgem that changing generation charges will damage investor confidence in the market.

Ofgem has proposed to charge all distribution network users the same amount, despite agreements power companies and network operators had before 2005 in which contracts decided no extra costs would be charged.

The group claim this amounts to a double charging for some electricity producers.

David Porter Chief Executive of the Association of Electricity Producers said: “It is of deep concern that Ofgem is considering retrospective changes of this kind midway through a project’s lifecycle for some generators. This will affect not only operational viability of certain projects but also the confidence of investors generally, who see a regulator changing the rules for existing installations.”

Making up the consortium are the Association of Electricity Producers, Scottish Renewables, Renewable UK, the Renewable Energy Association and Combined Heat and Power Association.

Mr Porter said the group had suggested its own recommendations:As the submission to Ofgem sets out, there is a compromise that can be reached which will effectively grandfather decisions on pre 2005 generators. At a time when the government is trying to do its utmost to attract new investment in electricity production in the UK, the proposals on offer signal “regulatory risk” when we are looking for stability and confidence’.”