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Electricity Generation

Volume 489: debated on Friday 20 March 2009

To ask the Secretary of State for Energy and Climate Change (1) what steps he is taking to encourage the distributed energy distribution network use of system charging on a cost reflective basis; (255141)

(2) what steps he is taking to encourage small suppliers of distributed energy to operate on the public electricity distribution network;

(3) what steps he is taking to reduce the burden of licensing regulation on small distributed energy operators;

(4) what steps he is taking to assist distributed energy operators to interact with the electricity system on a cost-proportionate basis;

(5) what work the Distributed Energy Working Group has undertaken; and what further work is planned.

In line with a commitment in the Energy White Paper 2007 DECC and Ofgem have agreed a set of proposals to allow larger DE schemes to become licensed suppliers operating on the public network, in a way that is proportionate to their size and impact.

The proposals are set out in a decision letter published by Ofgem on 6 February 2009. The letter includes a statutory consultation notice to implement a new standard licence condition that will mean that DE schemes do not have to be a direct party to costly and complex industry codes where they have alternative arrangements in place.

The letter also sets out guidance for the development and provision of supplier services agreements that will enable DE schemes and small suppliers to operate on the public electricity distribution network, with support from larger suppliers.

The ‘Distributed Energy Working Group’ was set up to advise on development of these proposals. Full details of the Group and its activity are on the Ofgem website:

There are no plans to continue to meet with the Distributed Energy Working Group as currently constituted. Members of the group continue to be involved in the development of wider Distributed Energy and Heat policy in other fora.

Distributed Energy Consultations published by Government and Ofgem have highlighted concerns that the current charging regime for using the distribution network does not properly reflect the benefits that DE can bring. These findings have been fed into a separate and ongoing project on the structure of use of system charges. This work is led by Ofgem working with distribution network operators.