Ofgem has raised concerns about the impact of future Transmission Network Use of System (TNUoS) charges, highlighting potential challenges for consumers and energy investment as the UK aims to achieve its clean power 2030 target.
In a recently published open letter, the energy regulator addressed the uncertainty around long term TNUoS charges, particularly for generators in Britain‘s northern areas.
The regulator noted that planned infrastructure developments to expand the transmission network could result in significantly higher charges for northern regions, while generators in the South may receive higher credits.
This disparity could potentially lead to higher costs for consumers.
Ofgem also expressed concerns that these rising charges, coupled with the current charging methodology, might discourage investments in renewable energy, which are critical to meeting the government’s clean energy goals.
The letter highlights that significant increases in TNUoS charges for Northern generators, as projected in the National Grid Electricity System Operator‘s (NGESO) ten-year forecast, could delay investment decisions and ultimately affect the overall cost to consumers.
To address this, Ofgem has called for a temporary intervention to reduce uncertainty in future TNUoS charges and has encouraged NGESO to submit a proposal for code modification, which would be considered at the CUSC Panel in October.
Ofgem also reiterated that any changes to the charging regime should still send appropriate locational signals to guide future investments while balancing the need to minimise overall system costs.
