Ofgem’s development of electricity transmission policy is dictated by its statutory obligations, in particular its principal objective to protect the interests of consumers, wherever appropriate by promoting effective competition.
Current transmission policy issues
Ofgem is engaged with the Department for Business, Enterprise and Regulatory Reform (BERR) and the 3 transmission licensees in ensuring that appropriate GB transmission access arrangements are maintained by National Grid Electricity Transmission Limited to provide access to the GB transmission system to parties on a transparent, non-discriminatory basis.
We are also working with BERR to put in place new regulatory arrangements for offshore electricity transmission.
Ofgem is currently consulting on enduring charging arrangements for distributed generation that impacts on the transmission system.
We have recently finalised the provisions of the transmission price control for the period 2007-12. We have provided substantial increases in investment to the licensees for replacing ageing assets, extending and reinforce the networks, as well as flexible mechanisms to remunerate uncertain demands for capacity. As well as collating information on the licensees’ spend, incentive mechanisms brought about by the price control require ongoing monitoring to ensure compliance with licence provisions. A major area of further work that follows from the price control is the development of output measures for the transmission licensees.
Other areas of our work include compliance monitoring and enforcement, electricity charging reform, GB connection offer determinations and responsibility for modifications to several industry codes including proposed changes to the treatment of transmission losses.