Ofgem rejects £120m rebate request for generators

Ofgem has rejected a request to modify rules that would have resulted in generators receiving a £120 million rebate funded by consumers. Generators claimed their network charges in 2015/16 exceeded […]

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By Priyanka Shrestha

Ofgem has rejected a request to modify rules that would have resulted in generators receiving a £120 million rebate funded by consumers.

Generators claimed their network charges in 2015/16 exceeded the €2.50 (£2.23)/MWh cap on transmission charges paid by them, which is set under EU regulations.

The proposal was requested by SSE in March 2016 to remedy the alleged breach of the upper limit of the charge range by returning the amount to generators.

The regulator has however rejected the modification on the grounds that most, if not all, local network charges, which mainly relate to transmission links connecting offshore wind farms to the grid, should be excluded from this cap.

On the basis these charges are excluded, the cap on generator transmission charges has not been breached.

Ofgem said: “We believe this decision to be the better interpretation of the EU regulation consistent with Ofgem’s statutory objectives and duties and in the long term interests of consumers.”