Current and future trends in the energy system will transform how we use the electricity networks. Smart technologies and new, innovative business models offer opportunities to adjust demand and supply at times and places where network capacity is limited. It is increasingly important that network capacity is allocated and used in a way which reduces the potential costs to consumers as a whole.
Here you can find information and outputs from our work and engagement relating to our review of network charging arrangements and forward looking charges.
We want to ensure electricity networks are used efficiently and flexibly, reflecting users’ needs and allowing consumers to benefit from new technologies and services while avoiding unnecessary costs on energy bills in general.
Our Strategy for regulating the future energy system and Plan for a Smart, flexible energy system (which is joint with government) describe how providing users with better signals about the costs and benefits they incur on the network at a particular time and place is a priority area to address.
In November 2017, we published a working paper launching the process we plan to use to address the key regulatory gaps, working with industry.
In December 2018, we launched a Significant Code Review (SCR) of network access and forward-looking charge arrangements. The SCR includes:
- a review of the definition and choice of access rights for transmission and distribution users
- a wide-ranging review of distribution network charges (Distribution Use of System (DUoS) charges)
- a review of the distribution connection charging boundary
- a focused review of transmission network charges (Transmission Network Use of System (TNUoS) charges).
Outside of the SCR, the Electricity System Operator and network companies are progressing:
- a review of aspects of allocation of access rights, including improved queue management and the scope for trading
- a review of balancing services charges. This is being taken forward by the Electricity System Operator through a Balancing Services Charges Task Force.
Timelines for the SCR
Given the number of issues and their importance, we will progress work as quickly as possible, consistent with running a robust process. Our aim is to:
- Publish working papers and other discussion materials – summer 2019
- Consult on our Minded-to-Decision and draft Impact Assessment – spring 2020
- Publish decision and final Impact Assessment – autumn 2020.
We are targeting to implement any changes in 2022 and 2023. Where possible, we may seek to implement any “quick wins” identified in advance of these dates.
We are committed to undertaking the SCR in a transparent and open manner. We also need industry input to support the development of different options.
We have set up a Challenge Group to provide ongoing wider stakeholder input into our review. If you would like to find out more information about the Challenge Group or would be interested in becoming a Challenge Group member then please email us at NetworkAccessReform@ofgem.gov.uk.
The Charging Futures Forum will continue to be a means of engaging with, and updating, a wider range of our stakeholders on reforms to electricity network charges. If you want to find out more about the Forum or would like to become a member then please contact email@example.com.
As our work progresses, we will continue to provide opportunities for stakeholders to discuss the potential options with us and feed in to our work. We will publish information about this here, alongside outputs from this work.