A further consultation document on the single electricity market was published jointly by Ofgem and the DTI in August. The report is part of continued consultations on the British Electricity Trading and Transmission Arrangements (BETTA).
One of the key aims of BETTA is to create a single transmission charging regime across Great Britain.

Part 1 of the document sets out a timetable for the development and implementation of a revised scheme – and charging methods.

One of the major problems the government faces is reconciling its desire for a single electricity market with its policy objectives for renewable energy. Part 2 of the new document looks at how the transmission charging regime might impact on renewables.

The government recognises that applying the current licence obligations are likely to result in the highest transmission charges in Scotland, an area where the potential to develop renewable energies is highest.

Consultation is continuing, and DIT and Ofgem invite further comment, particularly on how the charging model can work for the renewables industry rather than against it.

Suggestions from government include some method of mitigating transmission charges for electricity produced in a renewable way. However, the report stresses that models of charging which don't reflect costs 'would not give the right signals to encourage efficient investment'.

This would result in renewable energy customers facing higher costs, as the overall costs of transmission would increase over time.

Costs of transmission are significant. The National Grid Company currently recovers around £600 million a year for its network assets.

It is therefore important to government that any proposed changes in the system can be shown to be well-targeted, and efficient.

It is expected that Ofgem and DTi conclusions will be published in November this year. For further information on the document, and to make comments, see www.ofgem.gov.uk .

Source

Building Sustainable Design