Dozens of proposed gas and diesel-fired generators could be scrapped after Ofgem confirmed that it would almost wipe out the payments they receive for producing electricity at peak times. The regulator argues that payments to plants producing less than 100 megawatts give them an unfair advantage against bigger rivals. Curbing the so-called “embedded benefits” payments, which are made by suppliers as a result of Britain’s complex network charging system, could save consumers up to £7 billion by 2034, or £20 per household each year, it said. Critics said that the move would unfairly penalise businesses that had already made investments in expectation of receiving the payments. “The consequences for industrial manufacturers, hospitals and local authorities who generate their own power could be devastating,” Tim Rotheray, chief executive of the Association for Decentralised Energy, said. The change could also jeopardise plans to build small generators that could help to keep the lights on in coming winters, the association warned.
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