Ofgem has today announced changes to the way it calculates what generators pay to use the electricity transmission network.

Generators pay charges to flow power across the network while suppliers pay to take power from the network and transport it to homes and businesses. Transmission charges account for 4% of a household energy bill.

Generators face higher charges to transmit power the further they are located away from areas of high electricity demand as it costs more to transport energy to consumers. Generators in the south of England pay lower charges and in some cases receive payments.

Under the new plans, the gap between the north and south charges will reduce, the regulator said.

It added: “The main update will recognise that renewable generation uses the system less than traditional forms of generation and so imposes lower costs. The change will therefore more accurately reflect the costs that different generators put on the electricity network.”

The changes will come into effect in April 2016.