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Issue 883 | Ofgem letter: Implications of Charging Reform on Electricity Storage

Issue 883 | Ofgem letter: Implications of Charging Reform on Electricity Storage

Josephine Lord Josephine Lord Consultant

Ofgem letter: Implications of Charging Reform on Electricity Storage 29 January 2019 Headline Assessment 1 Assessment & recommendation Ofgem issued an open letter on the implications of charging reform on electricity storage on 23 January. The letter sets out the policy intent of its charging reforms and how it considers that industry-led modifications are critical to reaching a level playing field between storage (excluding any final demand) and generation. The regulator made it clear that it would like to see new DCUSA proposals raised that would remove residual distribution use of system (DUoS) charges from storage following the withdrawal of two proposals in October which had proposed to remove residual charge from all generation. The withdrawal followed concerns raised by Ofgem on the proposals’ scope. Ofgem also made clear that it wants to ensure that solutions for the treatment of storage in respect of the demand residual of transmission network use of system (TNUoS) charges and in respect of balancing services use of system (BSUoS) charges are not discriminatory or create harmful distortions between transmission-connected and embedded storage. This has implications for the scope and solutions proposed under two current CUSC modifications currently considering TNUoS and BSUoS storage demand charges. The views reiterate Ofgem’s earlier policy view that storage should not pay residual use of system charges on demand and should only pay BSUoS on generation and not also on demand, as it is currently required to do. Although the modification proposal route was intended to implement the changes as quickly ...

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