Ofgem refuses £120m rebate request from generators
Costs would have resulted in higher energy bills
Power generators have been refused a £120m rebate from industry regulator Ofgem, an amount that they felt they owed due to high charges for using the national transmission system from 2015-16. Had the request been approved, it would have ultimately been paid for by consumers, by the way of increased energy bills.
The generators said that the transmission costs in the period in question exceeded their €2.50/MWh cap. Ofgem disagreed, saying that this figure was reached because generators had bundled in costs from their offshore windfarms in, which do not qualify as they are “so-called network charges”.
In a press release issued today, they stated:
“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”.