On 18 December Ofgem launched their Significant Code Review (SCR) in Access and Forward-Looking Charging.
The review aims to:
- ensure that electricity networks are used efficiently and flexibly
- ensure they reflect users’ needs, allowing consumers to benefit from new technologies and services
- do this while avoiding unnecessary costs on energy bills.
You can view the launch letter from Ofgem here.
On 30 June 2021, Ofgem published its Access and Forward-Looking Charges minded-to consultation. This includes Ofgem’s proposals on access rights, connection charging and transmission network charges.
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These are rights a user has to access the electricity network. It comprises a connection from the user’s equipment to the wider network and an allocated capacity on that wider network. This capacity is the amount of power a user can demand or supply to their target market through the network.
The elements of a charge to use the network that vary with certain behaviours and decisions a user makes. They seek to reflect and indicate to users how their behaviours can increase or reduce future costs on the network. In this way they aim to encourage efficient use of the network.
The SCR scope includes:
- a review of the definition and choice of access rights for transmission and distribution users
- a wide-ranging review of distribution network charges (Distribution Use of System (DUoS) charges)
- a review of the distribution connection charging boundary
- a focused review of transmission network charges (Transmission Network Use of System (TNUoS) charges).
Ofgem are planning towards the following milestones for concluding the SCR and implementing the outcomes:
- Access SCR Minded to Consultation closes – 25 August 2021
- Publish Final Access SCR decision – expected late 2021
- Decision on relevant code modifications – expected in 2022
- Reforms begin to take effect – from 1 April 2023
To help progress the review Ofgem has set up two new groups; The Challenge Group and The Delivery Group.
These groups will ensure that the SCR is carried out in an open and transparent manner, ongoing wider stakeholder input and focus the necessary expertise and network data to help develop and assess options, in a timely manner. More information on these groups, including Terms of Reference, Membership, Agenda, Minutes and other resources can be found here:
The purpose of the Challenge Group is to provide ongoing wider stakeholder input into the SCR. This will provide a challenge function to the work of the Delivery Group ensuring policy development takes into account a wide range of perspectives and is sufficiently ambitious in considering the potential for innovation and new technologies to offer new solutions.
The purpose of the Delivery Group is to provide knowledge and experience of how the networks are planned and operated, to help develop and assess options. The Delivery Group may set up specific ‘working groups’ to produce deliverables in an agile, flexible manner. Membership will be limited to Ofgem, the Energy System Operator (ESO), distribution and onshore transmission network owners, the Energy Networks Association (ENA), relevant code administrators (eg DCUSA and CUSC), and a representative for IDNOs. Membership of the Delivery Group is limited to ensure we get the necessary expertise and network data to help us develop and assess options, in a timely manner. The Delivery Group will also be able to identify where they need input from wider stakeholders, including within any working groups.
The Energy Networks Association (ENA) provides the secretariat function for both the Challenge Group and the Delivery Group. ENA brings regulatory, commercial and technical expertise to support delivery of the SCR. Visit the ENA Website here.