Ofgem delays Transmission demand residual charge reform

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TRANSMISSION demand residual charge reforms have been delayed into 2022 after Ofgem responded to industry concerns over consumer preparedness.

The reform intends to move the residual element of transmission network charges from demand to a fixed charge based on a site’s available capacity, or recent annual demand.

The decision to delay the charge was made amid worry over risks that would have been difficult for the industry to manage and which could have led to significant costs to some non-domestic consumers.

The regulator had intended a new charging methodology to come into force in April 2021 but National Grid ESO made a request for an additional year.

The system operator and energy suppliers were concerned that clarity over the new banded charges would lead to contracting issues.

The accurate charges for April 2021 will not be available until late 2020 due to the new data requirements of the new charging structure and the code modification timeline.

The industry also voiced a growing concern over implementing the changes, where the accurate charges may not be delivered on time.

The changes will now take effect from April 2022, in line with similar changes to distribution charges.

All other elements of the charges besides the date will remain the same.

The transmission residual charge reform is explained in more detail at our newest Policy Report that you can access via our ICON app.