The Association for Decentralised Energy (ADE) has called for an independent review of ’embedded benefit’ proposals put forward by energy regulator Ofgem last week.
In a letter published last Friday (29 July) Ofgem confirmed it will review how much local generators, including on-site renewables such as solar and wind, pay to use the national grid network.
In a worrying development for existing solar and wind generators, Ofgem also said it might not grandfather in current charging arrangements, leaving them open to change.
As these generators export onto local electricity networks, instead of the national transmission network, they receive an ’embedded benefit’, according to Ofgem. It has been argued that these benefits occur as they reduce the need for new network infrastructure.
ADE has previously warned a review of embedded benefits could cost manufacturers as much as £170 million. ADE director Tim Rotheray said it is imperative Ofgem takes a “careful, holistic and systematic approach” to the situation.
“A full, independent review is needed to ensure that changes are in the interest of energy consumers and the energy system as a whole. Current proposals are being rushed through an industry process without sufficient analysis or review,” he said.
“Without a careful, independent review, the current proposals could undermine the UK’s transition to a lower cost and lower carbon network system, as well as costing energy intensive UK manufacturers millions of pounds a year at a time when energy costs are a key concern for their ability to compete in global markets.”
