Targeted Charging Review. Jodie Cartwright

Transcription

1 Targeted Charging Review Jodie Cartwright

2 The Drivers for Change in Charging Market Developments Distributed Generation Smart & HH Metering Facilitating Flexibility Predictable Charges Reflecting Sunk Costs Regulatory developments including evolution of European Increased penetration of distributed energy sources New consumer technologies Demand side response, energy storage, DSO Improving our forecasts and removing volatility Ensuring recovery of revenue in a fair manner from users 2

3 Potential scope of a charging review Linkages here will drive efficient use of the whole system How is BSUoS charged Market and Tariff forecasts NG incentive opportunity RIIOT2 implications on charging forecasts DSO balancing costs Increases complexity of balancing lack of information for DSO Can BtM storage remove some T&D charges? Behind the meter receives EBs Treatment of storage at T&D Treatment of Interconnectors Forecast accuracy reduces need for fixed charges Adds complexity to overall pot recovery Majority of new / battery storage Interconnectors have similar physical properties G and D Options for charging Reduced EBs likely to increase Gen BtM Further stranding of T investment BtM also limits sunk cost recovery from smaller G Greater clarity on how sunk costs will be recovered through certainty in charging Longer term certainty in charging Relationship between charging & access rights What is included in BSUoS Alternatives to triad avoidance EBs benefit D connected Gs and increase chance of exporting GSPs Review coverage of embedded benefits Treatment of sunk costs of transmission investment Used to manage impact of Reflecting exporting GSPs Harmonisation of T&D EBs limit sunk UoS charging cost recovery from smaller G for EB Helps ensure that sunk costs of investments are recoverable User commitment Balancing rights & commitment Increases Triad avoidance value Limits role of single user Access Rights High triad cost increases EBs Socialisation of constraints Behaviour driven by preconnection Generation Residual G/D Split Increases Triad cost Sunk costs recovered via Triad Demand Part of the sunk costs are recovered through locational element Treatment of new transmission investment Harmonisation of T&D connection Offshore local charges Opportunity for short term signal? Decreases onshore G charges Demand TNUoS (including Triad) Cost reflective locational signal means new Gen sites in most cost efficient place Firm/non-firm offer differences create imperfect price signals on where to site Prevent triad impact on (vulnerable) domestic customers Demand response Locational charging for generation Facilitating HH elective metering Broader Harmonisation of T&D UoS charging Locational Transmission losses increase price signal Zonal losses implications[cma] 3

4 Staged approach to a Charging Review Address short term drivers Ofgem s Targeted Charging Review Ofgem Future Focused Strategy Today Summer years

5 Charging Review scope item priorities Industry Feedback Immediate priority areas needing to be progressed in the short term Facilitating HH elective metering Zonal losses implications [CMA] Clarifying treatment of storage Embedded benefits quick fixes Market and Tariff forecasts RIIOT2 implications on charging forecasts These areas need to be considered in the next two-three years Treatment of sunk costs of transmission investment Coverage of embedded benefits Longer term treatment of storage Behind the meter Demand TNUoS (including Triad) Access Rights G:D (Generation Demand) Split Offshore local charges Longer term certainty in charging Treatment of new transmission investment User commitment These areas need to be considered in a longer time horizon What is included in BSUoS Harmonisation of T&D UoS charging Harmonisation of T&D connection Treatment of Interconnectors Long term vision considerations Single network charge Aligning T&D treatment of storage Reflecting exporting GSPs Locational charging for generation DSO balancing costs Market Splitting/ LMP

6 Charging Review scope item priorities Relating to TCR Immediate priority areas needing to be progressed in the short term Facilitating HH elective metering Zonal losses implications [CMA] Clarifying treatment of storage Embedded benefits quick fixes Market and Tariff forecasts RIIOT2 implications on charging forecasts Areas to be considered in the next two-three years Treatment of sunk costs of transmission investment Coverage of embedded benefits Longer term treatment of storage Treatment of new transmission investment User commitment Demand TNUoS (including Triad) G:D (Generation Demand) Split Offshore local charges Longer term certainty in charging How is BSUoS Charged Access Rights Behind the meter Areas to be considered in a longer time horizon What is included in BSUoS Aligning T&D treatment of storage Harmonisation of T&D UoS charging Reflecting exporting GSPs Harmonisation of T&D connection Locational charging for generation Treatment of Interconnectors DSO balancing costs Long term vision considerations Single network charge Market Splitting/ LMP Short Term Drivers 2-3 years not in TCR Scope In Scope of SCR In scope of TCR but not SCR Longer Term Issues Links to other work

7 Developments in charging through the TCR 1. Addressing distortions in today s market Treatment of sunk costs of transmission investment G:D (Generation Demand) Split Coverage of embedded benefits Behind the meter 2. Laying the foundation for the UK s smart and flexible energy ambitions How is BSUoS charged? Longer term treatment of storage Longer term certainty in charging 7

8 Developments in charging beyond the TCR 1. Priorities in the short term Offshore local charges Treatment of new transmission investment Demand TNUoS (including Triad) User commitment Access Rights 2. Laying the foundation for the UK s smart and flexible energy ambitions (long term) What is included in BSUoS? Harmonisation of T&D connection Reflecting exporting GSPs Treatment of Interconnectors Harmonisation of T&D UoS charging Locational charging for generation DSO balancing costs 8

9 Ambitious long term charging reform Single network charge and Market splitting/ LMP 9

10 Thoughts on the Charging Co-ordination Group Ofgem (Chair) Steering Group representing industry TCMF/ DCMF etc... Work Groups Targeted Charging Review (SCR + storage) Coordination activities Stakeholder forum, communications, and central programme co-ordination ENA TSO-DSO Charging Group Analytical support C/EDCM review (distribution) Transmission Charging Review Code Panels Analytical support to cover: Bespoke workstream analysis TSO / DSO consistency Consumer impact Long term economic assessment 10

11 AOB

12 Next meetings May 10 Wednesday June 14 Wednesday July 12 Wednesday Will be an 10:30am start unless otherwise notified. 12

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