Networks must adapt to CHP and renewable growth says UK regulator

10 September 2002 – Callum McCarthy, head of UK power & gas regulator Ofgem, today called for electricity distribution companies to react to the changing pattern of generation he envisages as result of government targets for renewable and Combined Heat and Power (CHP) production.

Speaking at today’s conference on CHP, renewables and electricity distribution networks, organised by Ofgem and the Institution of Electrical Engineers, McCarthy called for distribution network operators to act now if Government targets are to be achieved.

The Ofgem Chief Executive, said “We are facing a time of unparalleled change. Government targets for renewables and CHP represent a massive change in the pattern of generation, and in the operational demands that will be placed on distribution systems. The issues raised by this challenge must be placed at the top of the senior management agenda of every Distribution Network Operator (DNO)”

Highlighting the implications for distribution network operators, Mr McCarthy said that by 2010 a DNO could have 300 embedded generators connected to every substation on its network, compared to 300 over the whole of the network at present.

Recognising that the regulatory regime would need to be adjusted to accommodate the challenges and uncertainties in the future, McCarthy added, ” We want to contribute fully – proactively and positively – to the Government’s objectives for renewables and CHP within our legal powers and duties.

“Ofgem will do more than simply adopt a “slogan” policy where it agrees to any increase in investment, as a change to an existing price control, if that investment is described as a move towards distributed generation. What we need are the right incentives for efficient investment, which is capable of meeting actual demand for distributed generation at least cost to the consumers.”

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