Ofgem Consultation: Getting more out of our electricity networks through reforming access and forward-looking charging arrangements. Running the energy system costs society and the customer a certain total amount every year. That sum of that cost is currently derived in a particular way – transmission costs, distribution costs, including charging costs, wholesale market costs etc – and via a certain methodology and regulatory mechanism and then paid for via customer bills before finally being reimbursed to different parts of the energy system by suppliers. This is a top down, centralised, passive customer approach and no longer fit for purpose. Most of the Ofgem consultations recognise that the energy system is changing and recognise that there are ‘challenges’ in delivering a decarbonised energy system – even if they do not baldly say that the current rules are not fit for purpose. However, the consultations then tend to put forward suggestions based on the conventional framework of organising and costing the energy system. Such is the case of this access and charging review. Given we are trying to transform our energy system, then we also need to ask whether the way that we deliver energy and run the energy system is still the right way or whether we could deliver public policy goals by organising and costing the energy system in different ways. Unfortunately, the access and charging review consultation does not ask this question. Delivering a decarbonised, smart and flexible energy system is increasingly a very inter-linked process because of decarbonisation, digitalisation and decentralisation (as set out in Figure 1 below) most particularly coming together at the local level. This new local reality requires coordinating between energy vectors (heat, electricity, mobility) across different levels (local and national; distribution, transmission) via supply, storage and the demand side.
IGov 10th Oct 2018 read more »