Centrica proposes lasting solution to double charges on storage

Centrica has proposed a lasting solution to the unintended double charging of electricity storage for Contracts for Difference and Capacity Market costs.

The modification to the Balancing and Settlement Code (BSC), named P395, would replace an interim solution introduced in February that only rectified the issue for standalone facilities.

Prior to its implementation, the charges would be applied twice over to stored energy – once when it was purchased by the storage operator and again when it was sold on to the end user.

“To the extent that suppliers pass on these charges to their customers, the issue may act as a barrier to market for certain forms of generation and storage,” the proposal document explains.

“It may also be impacting new innovative business models, including but not limited to domestic storage.”

Unlike the interim measure, P395 would introduce the necessary registration, metering and calculation process to remove the liability from behind-the-meter storage systems, for instance, those co-located with solar farms.

The proposal document says several of these processes have already been developed for two related BSC modifications – P375, which aims to introduce meter splitting to enable consumers to buy and sell power through multiple parties, and P344, which will allow companies to create aggregated balancing market units without being the registered supplier for its components.

It calls for the modification to be implemented at the same time or shortly after P375.

Removing the liability for storage operators to pay final consumption levies, which also include charges for the Renewables Obligation and Feed-in Tariff schemes, was one of 29 actions identified in the government and Ofgem’s smart systems and flexibility plan published in 2017.

Ofgem plans to solve the issue by classify storage a type of generation for licensing purposes. The regulator launched the second of two consultations on its proposals in June.

The government has said it intends to establish the definition in new legislation but is still yet to do so.