The head of the UK’s Association for Decentralized Energy is calling on the country’s energy regulator Ofgem to launch a full Significant Code Review on network charging, as current short-term proposals put industrial manufacturing jobs at risk, and would increase the cost of keeping the lights on and delivering the UK’s low carbon ambitions.
 
Ofgem announced Friday that it would be reviewing how much local generators pay for their use of national electricity networks and that it was minded to accept short-term industry proposals rather than launch a full review.
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The ADE estimates that the changes being considered could increase industrial manufacturers’ costs by more than £170m. Some energy intensive manufacturers could see their energy bill rise by nearly £4m a year, reducing their ability to compete and putting jobs at risk.

Dr Tim Rotheray, Director of the Association for Decentralised Energy said: “It is right that Ofgem, as the independent regulator, review network charging to make sure all users are paying their fair share.
 
“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.”
 
Local generators export on to local electricity networks instead of the national transmission network. These local generators receive an ‘embedded benefit’ as they do not use the transmission networks, and lower consumer energy bills by reducing the need for new network infrastructure investments.
 
EDF, Scottish Power and Centrica have each proposed changes on how users pay for networks. These proposals are currently being rushed through an industry process.

The proposed changes will increase costs for all businesses and public sector organisations that generate their own power and export it locally – from industrial manufacturers to hospitals, farms and energy storage providers.
 
The proposals would also increase the challenge of keeping the lights on, as local generators could close and increase strains on the electricity system.
 
Transmission network costs are increasing substantially as a result of large increases in how much National Grid is allowed by the regulator Ofgem to recover from its customers. Transmission network costs are increasing from £2.47 billion in 2014-15 to £3.79 billion in 2020-21, a 53% increase.