Updating Of Renewable Energy Structures By Ofgem

With grid parity from energy suppliers on one side of the argument to more support being called for on the renewable side of the argument the job of Ofgem to regulate the market to the best interest of all including the government and the public is never an easy task. While Ofgem is set to integrate changes to the energy system it clear that not all will be happy with their plans.


The UK Still Has A Renewable Target To Meet

While the there has been a change to the 2030 EU Commission targets the 2020 goals has remained the same. The 15% objective is still set in stone and all involved are concerned that unless changes and the country continues at is current rate of renewable install then the target will be missed. While the domestic market has been buoyant over the recent 12 – 18 months the large scale solar panels industry and overall onshore area of the sector could be set for a turbulent time. This is coming at the worst possible time with the 2020 target luming large.

Is Ofgem Doing All It Can

Presently the ability of ofgem to encourage further investment from energy companies does look like a considerably difficult task as there appears to be no hard support coming from the government for the industry long term. Thus the sell of increasing sustainable power capacity for the grid may not be at the forefront of the big six when it comes to their next AGM meetings.

Energy Transmission Costs Set To Be The Catalyst

With the transfer of renewable energy to the grid typically costing a substantial amount of money due the distance that often needs to be traveled to get the generated energy on to the grid. This added expense to renewable energy providers is an area that ofgem will be looking to target. Thus a system for charging providers for using transmission lines is a plan that they are going to look to integrate.

power transport

Who Will Pay For The Renewable Transmission Costs

The first fears will be that the UK bill payer will have to pay if not for all of this but for a proportion of this through raised bills. In a time when energy bills are more in the news than ever before it’s fair to say that the UK government will not want another backlash.

Will We Witness the Rise Of The transmission Levy

With the recent furor that was vented on energy companies for the green energy tax that was buried in the small print and has only recently been brought to light to the masses who had on the whole been to a large degree unaware of the tactics being employed by certain members of the big six. It’s therefore fair to say that a degree of transparency will definitely be upheld from now on regarding energy surcharges.

Power Station Location Will No Longer Be An Issue

To a large degree power stations are built to the locality of where the energy is to be distributed and with conventional stations to a large degree being built close to the area where the power is needed. Currently power stations who generate further away from the distribution point have to pay higher amounts to use the power lines due to the transmission distances. It is such factors that are built into firstly building new renewable facilities which leads to increase in KW produced.

Will The New Renewable Energy Transmission Be Fair For All

It appears the new energy transmission actions to be taken by Ofgem will appease both sides, where as conventional providers want more grid parity this is to be met with new system making renewable energy providers pay more to use the gird. Conversely though the renewable provider be it large scale wind, solar power or other solutions will not be hit with location determined base rates. This is an attempt by Ofgem to make the market fairer by appeasing both set of providers.

Unrealistic Figures

A study by members of the big six energy companies have unsurprisingly called into question Ofgem’s figures with calls that the system didn’t need changing and if brought to fruition could cost every home an additional £10 a year in costs via increase energy bills. With the big six for a sustained period of time asking for parity it appears the message is be careful what you wish for as Ofgem were unlikely to ever fully satisfy one market without upsetting another.

What Will Be The Benefits Of The New Renewable Transmission System To Bill Payers

Ultimately it’s projected that the measures will have a positive impact on sustainable energy uptake and will further increase the number of wind turbine and solar panels projects within the UK. Essentially meaning that their is no added detriment to an organization or investors looking to install a renewable project in no close proximity to the grid. Also current solar power and wind farms which are producing energy will welcome the news as their generation cost will be set to all.

Some previous related articles of interest:
Big business needs to do more to support the renewable industry
Scotland and England to discuss long term renewable goals
What the RHI scheme could mean to the overall renewable sector

Updating Of Renewable Energy Structures By Ofgem
Ofgem looking to sure up the renewable energy industry with stronger controls for the renewable energy industry.

SolarKing UK
Ofgem, Renewable energy industry
The way in which big business could do more to adopt renewable energy.

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February 21, 2014
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