Transmission Charging Developments DCMF3 rd June 2010

Overview of Current Issues  Interconnectors  ‘Wind’ Charging  Offshore Update  HVDC Links  Open Governance  Embedded Generation

Embedded Generation  Both embedded and transmission generators compete to sell energy to suppliers  Suppliers charged for use of system on basis of net off-take from the network (i.e. demand minus embedded generation)  Charges comprised of locational + residual elements  Net charging introduces a GB wide benefit for EG over T-connected due to the residual element of charges (~£20kW)  Two possible solutions include:  Continue to charge net but implement nodal explicit access rights – i.e. remove competition between EG and T-connected  Implement a gross charging regime, maintaining full competition but levelling the playing field between the two The Issue

Embedded Generation  Original TADG Working Group (2007 – Chaired by Ofgem)  Interaction with ‘Small Generator Discount’ – April 2011 (SLC C13)  NGET pre-consultation January 2010; followed by working group meetings  Maintaining competition between EG and T-connected is likely to present a more attractive proposal for consumers  Charging suppliers on a gross basis removes the benefit caused by the residual; three options for how this could be implemented are: (i)Gross G+D G MW Triad and D MW Triad (ii)Gross G+D G installed MW and D MW Triad (iii)Net G+D locational and Gross D locational + residual Progress

Embedded Generation Practical Implications Annual Tariff Setting (January – Data in Oct./Nov.) Billing (Monthly) Reconciliation (May) BSC Mod. P0210 file CUSC Mod. ‘Demand Forecast’ BSC Mod. P0210 file  Additional HH data required per Supplier BMU per GSP Group  Net Period BMU HH Allocated Volume (Demand minus generation; as received currently)  Gross Period BMU HH Allocated Demand Volume (Gross Demand; new data item)  Gross Period BMU HH Allocated Generation Volume (Gross Generation; new data item)