Project TransmiT is Ofgem's independent and overarching review of the connection and transmission charging regime. On 22 September 2010, Ofgem issued a call for evidence seeking the views from all interested parties on the scope and priorities of the review. Interested parties will include generators, suppliers, network companies and consumers.
Over the last decade or so, there has been an increasing amount of frustration from generators around the rules concerning both the access to the electricity transmission network and the charges payable for such access. Renewable generators, in particular, have faced many difficulties in securing access to the grid and pre-existing generation plants based in Scotland faced significant hikes in their transmission charges with the introduction of the controversial locational charging regime.
Whilst some measures have been taken to improve the position of renewable generators (such as the introduction of the connect and manage regime) it is considered that a more systemic review is required if Ofgem is going to be successful in meeting its various (and sometimes competing) objectives to:
- Facilitate the move towards a low carbon future;
- Ensure security of supply (e.g. by maintaining a fuel mix of generation);
- Encourage competition between generators and suppliers; and
- Protect consumers by continuing to provide value for money (e.g. by minimising additional costs for achieving a low carbon future).
In addition to lobbying from businesses, this is an area that is highly political and the Scottish Government has been working closely with Scottish generators to push for standard transmission charges across Great Britain. At present, Scottish generation accounts for 12% of electricity and 40% of transmission charges. Project TransmiT is a real opportunity for all parties to help shape the future of transmission charging and connection arrangements albeit this scoping exercise represents a very early stage in the process. The closing date for responses is 17 November. Ofgem anticipates bringing forward its first proposals in spring 2011 and publishing its recommendations in summer 2011.
It is worth noting that overarching all of Ofgem's work will be developments at the European level to achieve common regulatory approaches to matters such as transmission charging and capacity allocation and congestion management for electricity.