Generating reform

The UK government and Ofgem have proposed reforms of the rules governing access to the high-voltage electricity transmission network.

Reforms to rules governing access to the high-voltage electricity transmission network and the investment incentives on transmission companies are being proposed by Ofgem and the Department for Business, Enterprise and Regulatory Reform (BERR).

According to Ofgem, the changes would allow for much faster connection of more than 35GW of renewable generation to meet the government’s target of generating 15 per cent of Britain’s energy from renewable sources by 2020.

Ofgem also stated that the reforms will make it easier for other low-carbon generation and any new nuclear plants to connect to the transmission network as existing power stations reach the end of their operating lives or need to be replaced with lower carbon forms of generation.

Access to the transmission network is currently governed by rules that were devised to connect large conventional gas, coal and nuclear power stations. These rules are said to be poorly suited for rapidly connecting a large volume of smaller renewable generators or a significant volume of new conventional, lower carbon generation. Reform of the access rules is critical if Britain is to achieve its 2020 renewable targets and maintain security of supply.

Steve Smith, Ofgem’s managing director for networks, said: ‘Industry must embrace the challenge of making sure the expansion of renewable generation is not delayed solely because of the arrangements for governing access to the high-voltage transmission network.

‘Reforms to arrangements for accessing the network will allow the connection of more than 35GW of new generation. Ofgem and BERR are determined to drive through these reforms and the government will consider legislation if the industry tries to delay or resist change.

‘We will also change the financial incentives on the transmission companies to invest in the new capacity that will be needed to connect more remote renewable generation. This will allow the transmission companies to build future capacity so it is ready when the new generation comes on stream. It will also protect customers from having to pay for unnecessary investment in new capacity. This is vital in an era of rising fuel prices and fuel poverty.’

Plans to reform the access arrangements and investment incentives will be developed and implemented over the next two years. However, recognising that there is already a substantial queue of lower carbon renewable generation needing access to the system, Ofgem is also proposing short-term measures to allow more generation to connect to the existing transmission system before new capacity is built. This could see more than 1GW of additional renewable capacity added to the system if developers are able to accelerate their existing plans.