Ewing laments additional delay in OFGEM transmission reforms

ofgemOfgem has announced an update on its review of electricity transmission charging arrangements, Project TransmiT.

The new arrangements were due to be implemented in April 2014. However, in light of important new issues arising from further modelling work and new information provided by industry, Ofgem has decided to consult further on this analysis.

While Ofgem has at this stage not changed its minded-to position to approve the option ‘WACM2’, Energy Minister Fergus Ewing has said he is disappointed at the delay in ‘introducing measures to tackle long-term discrimination against Scottish electricity generators.”

He said: “In April 2008 the First Minister and representatives of Scotland’s electricity industry met with Ofgem and presented an unanswerable case for transmission charging reform. It is unacceptable that there is still no change almost six years after widespread political consensus on the need for reform was reached.

“Ofgem has already overseen three years of exhaustive examination of electricity transmission charging and associated connection arrangements, and has had since June last year to analyse the evidence and make its mind up.

“That there should be not one, but two delays introduced into the decision making process just adds to the uncertainty faced by Scottish generators who are already struggling to deal with the UK government’s slow and piecemeal introduction of Electricity Market Reforms.

“Benefits for consumers are also being put on hold. The changes which Ofgem is delaying would help support the transition to a low carbon energy mix and deliver significant long-term benefits to consumers – cutting bills by around £8.30 a year from 2020 according to the figures used by Ofgem – and help keeping the lights on south of the border”

Ewing has now called his Scottish Energy Advisory Board to an ‘urgent meeting’ to assess the impacts of the delay on Scottish generation.

A spokesman for OFGEM said: “We consider that it is important to allow generators to respond to any change within the notification period required by the user commitment arrangements, and to give suppliers sufficient lead time ahead of implementation to avoid them building risk premiums in future for fixed tariff offers to consumers.

“We consider these issues are important in order to protect the interests of consumers. This means our current view is that, were we to accept, we are now minded to implement in April 2016.”

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