Scottish Renewables has criticised Ofgem’s decision not to back the introduction of a temporary cap-and-floor model for transmission charges paid by developers.
The trade body said the regulator’s rejection of CMP444 – a code modification proposed by the National Energy System Operator to mitigate the risk of increased costs until longer-term reforms are introduced later this decade – is a “clear misstep” that threatens the future of Scottish offshore wind farms.
Under the existing Transmission Network Use of System (TNUoS) methodology, generators pay higher charges the further they are from major demand centres, which penalises projects in remote areas including Scotland.
The charges are also viewed as highly unpredictable.
“The UK government rightly recognised this summer that reforming volatile and outdated transmission charging is fundamental to securing a clean energy system,” said Scottish Renewables head of grid and networks Stephen McKellar.
“Scottish projects have long been penalised under the current system, which is actively undermining their competitiveness.
“Rejecting CMP444 is a clear misstep with the need to balance long-term reform with short-term certainty.
“To build on the progress already made across Scotland’s pipeline and supply chain we must create the best possible conditions for the next Contracts for Difference auction.”
Ofgem said in today’s (23 October) confirmation of the ‘minded-to decision’ it gave in July to rule out the NESO proposal that placing upper and lower limits on charges would not “better facilitate achievement of the Applicable Charging Objectives” than existing provisions.
The regulator added the government would publish a timeline later this year with key activities for delivering full TNuOS reform by 2029.
Scottish Renewables’ McKellar added: “As we await a final decision on CMP432, we need immediate assurance of how Ofgem will work with industry, government and NESO to prevent even greater risk being added to the investment and deployment necessary for our shared objectives.”