Important changes to distribution charges that would have helped distributed energy schemes have stalled after protest by some licensed distributors.
Distribution charges are paid by both generators and customers connected to the distribution network. Charges vary by customer type and distribution zone. Ofgem, the electricity and gas regulator instigated a review of distribution charges to better reflect distributed energy.
Originally, OFGEM proposals were to include a “short haul” tariff to bring in cost reflective pricing. This would have reduced the charges paid by distributed energy schemes connected to a distribution network (not a private wire scheme) to reflect the fact that generation and consumption occur locally. It would also have required cost reflective generation charges for distributed generation, which in some areas would have allowed generation to be paid (rather than pay) to be connected.
However, the package of changes was rejected by a number of distribution license holders and so changes cannot be implemented. Ofgem is currently consulting on whether to send the proposals to the Competition Commission. New proposals with cost reflective pricing for distributed energy are now at least two years away.
