Wednesday, 22 September 2010

National Electricity Grid Faces Ofgem Review

The energy regulator Ofgem has announced a comprehensive and open review of
the charging regime and associated connection arrangements for using
Britain's high voltage commercial
electricity network and high pressure gas grid. The electricity and gas grid charging regimes have served customers well,
for example, by encouraging power generators to locate close to where
electricity is used. However, Britain is facing an unprecedented challenge as it moves to a
low-carbon energy system and new kinds of generators such as wind and wave
power stations have less flexibility on where they are sited. This is an
important issue for Scotland as many low-carbon generators choose to locate
there because of the favourable geographic and weather conditions.
Ofgem has launched Project TransmiT to ensure the regimes promote security
of supply and a low carbon future, while keeping the cost of transmission to
customers under control.
Alistair Buchanan, Ofgem's Chief Executive, said: "Project Discovery
identified the need to invest up to £200bn to secure low-carbon energy
supplies for Britain. The electricity and gas grids play a fundamental role
in meeting this huge challenge. Project TransmiT will consider whether the
way in which grid costs are shared between users needs reforming."
The review is in line with the clarified sustainability duties that the
Energy Act 2010 has given Ofgem in April, and the terms of the Third EU
Energy Package passed in September 2009. Also, from the New Year, industry
parties and Ofgem will have the ability to instigate changes to the charging
regime following reform of the industry governance arrangements.
Stuart Cook, Senior Partner, Smarter Grids and Governance, said: "As a first
step Ofgem has published a call for evidence seeking views on the scope and
priorities for the review and any objective analysis from all parties with
an interest in the charging regime.

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