In August this year, Ofgem launched a Significant Code Review (SCR) to address their concern that the current framework for residual and cost-recovery charging may result in inefficient use of the networks and unfair outcomes for consumers.
On 6 Nov, Ofgem published their latest thinking on how they will progress with this work. In this paper Ofgem discuss their collected thoughts on how they intend to resolve the current framework for residual charges before outlining our proposed approach and justifications to our decisions.
- Ofgem believe that residual charges should be recovered from suppliers, rather than generators or a combination of suppliers and generators.
- Ofgem are proposing to take forward four in depth assessments of mechanisms for residual recovery to detailed quantitative assessment (fixed charges, capacity demand charges, gross consumption charges and baseline charges).
LEARN: Read Ofgem's working paper on the Targeted Charging Review here.
Ofgem held stakeholder workshops on the Targeted Charging Review in November. A note on the workshops from Ofgem has been published.