ADBA today called for triad payments for small electricity generators to be protected following Ofgem’s announcement that it is minded to lower the payments that small embedded generators receive for producing electricity at peak times.
The embedded benefit, which is a discount on transmission network charges received by smaller, local generators, will be reduced by 95%, from £45/kW to less than £2/kW.
The announcement follows two Connection and Use of System Code (CUSC) modifications raised to call for reform embedded benefits, which include ‘triad’ payments that some generators can receive for helping suppliers to avoid transmission demand residual charges.
ADBA responded to the call for evidence that Ofgem launched on triad payments in summer 2016 by calling for the value of embedded benefits to be protected.
ADBA Chief Executive Charlotte Morton said:
This change will have a disproportionate impact on sub-5MW generators, many of which are anaerobic digesters. AD and other renewables should be grandfathered due to their important role in decarbonising the UK grid, and punishing them in the short term will only have the effect of making the UK’s transition to a low-carbon economy more expensive in the long term.
Ofgem’s proposal is likely to lead to more big, dirty power coming online, which makes a mockery of the Government’s commitment to UK Carbon Budgets and climate change goals.
ADBA will be submitting evidence to the consultation to this effect and working hard with Ofgem to encourage them to think again. Renewables are critical to the success of the UK economy, and we should be supporting them rather than undermining them.
The consultation closes on 10 April, with a final decision expected in May.