Ofgem rejects £120m rebate request from generators
Press release
- Publication date
- Industry sector
- Transmission Network
Ofgem has decided to reject a requested modification to industry rules which would have resulted in generators receiving a £120 million rebate funded by consumers.
Generators claim that their network charges in 2015/16 exceeded the €2.50/MWh cap on transmission charges paid by generators, which is set under an EU regulation.
On 8 March 2016, SSE submitted “CMP 261”, a modification to address this alleged breach by returning £120 million to generators.
This rebate would ultimately need to be recovered from consumers via network charges.
Ofgem has rejected this modification on the grounds that most, if not all, so-called local network charges, which mainly relate to transmission links connecting offshore wind farms to the grid, should be excluded from this cap.
On the basis that these charges are excluded, the cap on generator transmission charges has not been breached.
We believe this decision to be the better interpretation of the EU regulation consistent with Ofgem’s statutory objectives and duties and in the long-term interests of consumers.
Further information
For media, contact:
Tim Webb: 0207 901 7179
Media out of hours mobile: 07766 511470 (media calls only)
For investors, contact:
Martin Young: 0207 901 7114
About Ofgem
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.
For energy insights and updates straight to your inbox from Ofgem, please subscribe.