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Generation Dominated Areas

Generation Dominated Areas. Oliver Day UK Power Networks (on behalf of DNOs) . Recap. Fifth condition on CDCM regarding “Generation charging in generation dominated areas” to be completed by September 2010

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Generation Dominated Areas

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  1. Generation Dominated Areas Oliver Day UK Power Networks (on behalf of DNOs)

  2. Recap • Fifth condition on CDCM regarding “Generation charging in generation dominated areas” to be completed by September 2010 • To meet fifth condition DNOs submitted “Generation charging in generation dominated areas” report to Ofgem on 1 September 2010 • DNOs proposed to undertake a study on the issue of tariffs in generation dominated areas • Ofgem published decision on “Generation charging in generation dominated areas” condition on 14 December 2010 • Further requirements including an interim report April 2011

  3. Meeting the extended condition DNOs appointed Frontier Economics to undertake the study on the issue of tariffs in generation dominated areas Frontier Economics conducted extensive analysis using DNO and other industry data DNOs submitted Frontier Economics Report to Ofgem on 1 April 2011 DNOs and Frontier Economics met with Ofgem on 6 May 2011 to discuss the report and its conclusions

  4. Report Conclusions • Frontier Economics provided three conclusions to their report: • Conclusion 1- There is a strong case against introducing a complex locational charging regime that would derive tariffs for generators connected to both the HV and LV levels at a highly geographically granular level as things stand today • Conclusion 2 - There may be a case for introducing a simpler charging regime that derives some form of location based tariff for generators connecting at the HV level • Conclusion 3 - Careful consideration should also be given to any advantages and disadvantages that are more difficult to quantify

  5. Impact on CDCM …at this time • No requirement for ‘locational’ charges • No requirement for any changes to LV • Some CDCM changes currently being progressed impact generation • MIG001 – Commonality of 500MW model • MIG004 – Generation scaling • MIG013 – Remove single rate tariff for generators

  6. Next steps • Frontier Economics drafting the ‘final’ GDA report • Report expected to propose that on balance there is no requirement to implement urgent change • This also allows for EDCM approval and some conclusion of CDCM work that is in progress • Report expected to suggest timescale for implementing initial GDA charging measures in April 2013 • using the GDA benchmark as a measure for monitoring what needs to be done and when • Expected delivery before the end of June

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