Ofgem to review gas and electricity grid charges

Alistair Buchanan, Ofgem’s chief executive, said that the so-called Project TransmiT will consider whether the way in which grid costs are shared between users needs reforming.

As a first step Ofgem will be seeking views on the scope and priorities for the review. Initial proposals will be published in spring 2011 with a decision on taking the proposals forward to follow in the summer.

SNP Westminster Energy spokesperson Mike Weir MP welcomed the project as an opportunity to end the discriminatory transmission charging system which he claims results in Scottish electricity generators paying the highest grid charges in the UK.

Weir said: ’The SNP have been pressing Ofgem to move away from their current charging model for years. I am pleased that they are finally accepting that the present regime is not suitable for the encouragement of low carbon renewable generation given that such generators have little option as to where they can site developments. The present encouragement to site near centres of population is clearly unsuitable.