Hundreds of British industrial sites face being burdened with higher energy costs, in a proposed shake-up of the rules governing small power plants. Some 375 industrial sites around the country that have installed small “combined heat and power” (CHP) plants could take a combined hit of £160m a year under plans being considered by energy regulator Ofgem, according to new analysis. These sites currently benefit from lucrative payments worth an estimated £80m a year for exporting their surplus electricity to the local power distribution network when UK supplies are scarce. They are also currently exempt from paying charges faced by bigger power plants to help fund maintenance and upgrades to the UK’s high-voltage electricity transmission network. These cost reductions are worth an extra £80m a year, according to analysis by the Association for Decentralised Energy, which represents small power plant owners. But Ofgem has said it believes that these so-called “embedded benefits” that small power plants such as CHP and diesel generators enjoy may be “distorting energy markets”. In a consultation that closed on Friday, the regulator considered scrapping the payments the plants receive. It has also indicated it may make further changes, which could include making them pay network charges.
Telegraph 24th Sept 2016 read more »