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RWE has accused Ofgem of breaching its statutory obligations with network charging plans that will put customer bills up.
The energy company made the extraordinary attack in a last-ditch attempt to block changes to the balance of transmission charges across the country.
Ofgem admits the proposals developed under “Project Transmit” are expected to cost consumers between £65 million and £1 billion out to 2030. That will add up to 75p to the average annual household bill.
The regulator says this cost will be outweighed by “non-monetised” sustainability benefits, namely boosting the UK’s chances of meeting its renewables target and carbon targets.
RWE dismissed that conclusion as “highly speculative and unsound” and “entirely without evidence or merit”. In its consultation response, the company argued the measures conflict with Ofgem’s duty to protect the interests of customers.
It is the latest brickbat in a long-running battle that has already seen Ofgem delay the changes by two years, to take account of extra analysis commissioned by RWE from consultancy NERA.
Ofgem’s preferred approach narrows the gap between charges levied on Scottish generators and their southern neighbours.
Scottish generators are subject to higher charges to reflect the fact they are sited further from centres of demand, incurring higher costs on the network. However, there is strong appetite to develop windfarms in some of those remote areas and high network charges are hampering that drive.
SSE, which owns and is developing significant generation capacity north of the border, backs Ofgem’s proposals. In a blog for Utility Week, SSE’s Paul Smith argued they would create a fairer system and Ofem needed to “get on with it”.
RWE, which with more generation projects in England and Wales is expected to be a net loser, previously criticised the proposals as “a hidden subsidy to Scottish renewables”. The company also owns supply business Npower.
An Ofgem spokesperson said the regulator was considering the consultation responses and would publish its conclusions shortly.
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