‘Ofgem changes could cost local generators £170m’

The Association for Decentralised Energy (ADE) estimates proposed Ofgem changes could cost the industry £170m. The ADE today called on the regulator to properly review current proposals, which it says will increase […]

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By Jonny Bairstow

The Association for Decentralised Energy (ADE) estimates proposed Ofgem changes could cost the industry £170m.

The ADE today called on the regulator to properly review current proposals, which it says will increase costs for all businesses and public sector organisations that generate their own power and export it locally. This would include industrial manufacturers, hospitals, farms and other businesses.

Some of the largest of these local generators’ energy bills could rise by nearly £4m, reducing their ability to compete and putting jobs at risk.

At the moment these relatively small decentralised generators receive a financial benefit for not using transmission networks. Ofgem has claimed this is unfair.

EDF, Scottish Power and Centrica have each proposed changes on how users pay for networks.

The ADE suggests the proposals would also increase the challenge of keeping the lights on as local generators could close and increase strains on the grid

Dr Tim Rotheray, Director of the Association for Decentralised Energy said: “It is right that Ofgem, as the independent regulator, review network charging to make sure all users are paying their fair share.

“Without a careful, independent review, the current proposals could undermine the UK’s transition to a lower cost and lower carbon network system, as well as costing energy intensive UK manufacturers millions of pounds a year at a time when energy costs are a key concern for their ability to compete in global markets.”