The UK could save up to £300million within the next five years if changes are made to the electricity generators’ licenses, according to DECC.
The Government published its response to the Transmission Constraint Licence Condition (TCLC) yesterday, commenting on the proposals to modify the standard conditions of energy generating licences.
It claimed changes should be made to the amount paid by National Grid for energy generators when they have to switch off during times of low electricity demand.
The response showed constraint payments of £324million were made last year to gas, coal and wind generators. With limited options available to National Grid for balancing the network currently, DECC claims it is possible for generators to take advantage of it.
The Government said it has decided to modify licences to prevent generators from benefiting unfairly at the cost of consumers.
Energy Minister Charles Hendry said: “The changes we are making aim to strike a balance between compensating generators for financial risk and protecting consumers from excessive charges.
“Going forward, we expect upgrades to the electricity network to improve the flow of electricity through the system and reduce the need to constrain transmission.”