An update on Ofgem’s Targeted Charging Review
Binoy Dharsi, a Senior Transmission and Trading advisor has been leading the EDF Energy trading project and shared where Ofgem are up to in their Targeted Charging Review and how it’s likely to impact business customers.
Here’s the key take out’s from the webinar. You can listen and view again on our webinar page.
What are the Targeted Charging Review’s goals?
Less than a decade ago users drew power predominantly from centralised generation. Network costs were charged predominantly on the volume used over the network. The consumption and generation landscape has changed. With subsidies for PV solar panels and back-up generators for industries, a net volumetric method of collecting charges lowers contribution of network costs. Industries charged residual costs based on just a few periods per year can switch them on and avoid these costs. This increases costs to other users.
The avoided network costs do not equal the benefit to a reduction in whole system costs, therefore reform is required to ensure those with behind the meter generation contributes fairly to residual costs.
Why is this important for business?
This will impact your energy costs and Ofgem are currently looking at various options.
What do I need to look out for?
The analysis from Frontier Economics will become available by the end of May 2018.
What’s happening next?
This is a complex review with many factors to take into consideration, as Binoy covers. In June 2018 analysis will be ready to review from this process and EDF Energy intend on communicating what this means for different types of customers. There will be an opportunity to respond to the Ofgem consultation on TCR in summer 2018 which will give an opportunity to make your views heard.
You can listen again here and we will aim to keep you informed as the review progresses.