Yet another Ofgem delay on transmission charge review

Ofgem has announced yet another delay over its review of transmission charges, Project TransmiT, with a second round of consultation about the issue. This means that any reduction in charges is now unlikely within the next two years.

The implementation date has moved back a number of times. It was originally envisaged that it would be in place in April 2012. More recently the date has gone back from April 2014 to April 2015.

Under the current system producers of electricity are charged in a way which reflects their distance from major centres of population. This effectively means a subsidy for generators in the south of England, while those in the north of England and Scotland are penalised.

Ofgem said: “We consider that it is important to allow generators to respond to any change within the notification period required by the user commitment arrangements, and to give suppliers sufficient lead time ahead of implementation to avoid them building risk premiums in future for fixed tariff offers to consumers. We consider these issues are important in order to protect the interests of consumers. This means our current view is that, were we to accept, we are now minded to implement in April 2016.”

Scottish energy minister Fergus Ewing said: “I am extremely disappointed in Ofgem’s decision to delay yet again the introduction of measures to tackle the long term discrimination against Scottish electricity generators. It is unacceptable that there is still no change almost six years after widespread political consensus on the need for reform was reached.”

Labour’s shadow energy minister Tom Greatrex said it was “frustrating” that the reforms would be delayed by a year. However, he added, “When Scottish generators receive around a third of the UK’s overall support for renewables with less than 8.5% of the population share, the greatest threat to renewable investment comes from the prospect of separation, not from delays to Ofgem’s reforms.”

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