Energy watchdog sparks debate with its plans to overhaul network so private grid owners shoulder more of the costs
‘We think that they should pay a fair share of the costs of the network which is available to them all year’
THE energy regulator is heeding calls for a radical overhaul of how Britain’s power lines and pylons are funded ahead of a “revolution” which threatens to burden those left behind with higher bills.
Ofgem has kick-started a longawaited review of how it recovers the cost of maintaining the country’s electricity networks ahead of a boom in small-scale power units, such as solar panels and batteries.
“Electricity market and regulatory arrangements were designed for a system with very different characteristics to those expected in the future”, said Andrew Wright, a partner at Ofgem.
In the past the cost of maintaining Britain’s grid was spread across all those who used it. However, the steady shutdown of large power plants and rise of renewable technologies has brought a boom in the number of those who generate their own electricity and don’t help shoulder the shared costs.
The dramatic shift in how the UK powers its homes and businesses means those who are left behind could end up with higher bills by shouldering a higher share of the grid’s costs. Frances Warburton, a partner at Ofgem, said in some cases a factory or a community which is supplied by its own local generation via a private grid will only occasionally use the high voltage network, meaning they will not pay much towards upkeep of the grid.
“We think that they should pay a fair share of the costs of the network which is available to them all year round,” she said.
The call for reform was first raised almost a year ago when trade group Energy UK warned that failing to adapt to the UK’S changing power mix could saddle consumers with even higher energy bills.
A spokesman for Energy UK said yesterday that the new strategy was “an important step” to providing a charging regime which was fit for the future energy system.
“[It] will allow efficient investments to be made and fair charging for customers,” he added.