Ofgem should ditch the targeted charging review reforms to schemes that support the deployment of flexible energy technologies, a report by the Renewable Energy Association (REA) has said.
The Flexible Futures report, which was co-authored by ElectraLink, said the reforms were “damaging” and that Ofgem should prioritise flexibility.
The Targeted Charging Review (TCR): Significant Code Review (SCR) was launched in August 2017 and assesses how residual network charges should be set and recovered in Britain.
However Dr Nina Skorupska, chief executive of the REA, said: “Ofgem’s proposed targeted charging review reforms will undermine the deployment of flexible energy technologies and require urgent review.
“To meet our net zero targets Ofgem must have decarbonisation as part of its mandate.”
Data published in the Flexible Futures report shows that electricity exported to the distribution networks doubled to 45TWh between 2012 and 2018, with growth largely coming from ‘variable’ sources.
In total 39.8TWh of the total 45TWh exported is from renewable sources, ranging from wind to waste-to-energy
The report says that while most of the growth in exports since 2012 has been from renewable sources, government cuts in 2017 and 2018 “greatly slowed” the growth in exports. Exports from fossil fuels meanwhile have grown since 2016.
While most of the power exported is from renewable sources, the report calls for “significantly more” variable generation from wind and solar in order to meet net zero decarbonisation targets.
Unlike large-scale fossil generation, variable generation is largely being connected at the low-voltage distribution network. Managing this “historic technological shift” will require more flexibility from technologies such as batteries and demand response, the report suggests.
Daniel Brown, report author at the REA, said: “To meet net zero we will need more power generation than we have today, but as nuclear and coal come offline there is a lack of policy that will fill the gap.
“Industry models forecast that electricity from technologies such as wind and solar will be crucial for delivering net zero.
“For the first time the Flexible Futures data gives us an indication of the extent to which they are being deployed at the more local distribution networks, rather than at the transmission level.
“The data shows that exports have doubled since 2012 and given the pace of innovation in the renewable energy sector we can expect fresh growth in the 2020s. To accommodate this, flexible energy technologies need to sit at the heart of future planning and network upgrades.”
Meanwhile an Ofgem spokesperson said:“The energy system is changing rapidly, and flexibility is increasingly important. We are working on a programme of work to ensure network access, charging and system operation arrangements enable a smart, flexible energy system.
“The Targeted Charging Review is part of this programme and examines reforming the system of inefficient payments and charges which benefits some small power plants, including diesel generators, distorts the market, and unnecessarily adds costs to consumer energy bills.
“We calculate that the overall impact of our proposed changes on decarbonisation would be positive and consumers overall save money.“