the impacts of Targeted Charging Review reforms
We provided Ofgem with modelling support as part of their Targeted Charging Review (TCR) into residual network charging arrangements.
The initial Embedded Benefits Review (CMP264/265) considered the impact of removing the ability for distribution-connected generation to avoid transmission network charges (TNUoS). The TCR expanded on this work to include a wider range of network users – namely, behind-the-meter and onsite generation and storage – as well as considering distribution network charges (DUoS).
It also explored the implications of removing the transmission generation residual (TGR) and the embedded benefit derived from balancing system charges (BSUoS).
In partnership with Frontier Economics, we used our EnVision model to analyse the likely impacts of changing the levels of these incentives at the individual asset level, and from the perspectives of consumers and the system. The key metrics we produced to evaluate the alternatives included:
- GB capacity mix, including changes to levels of on-site generation
- Total system and consumer costs
- Peak and baseload wholesale prices
- Carbon emissions intensity
This analysis and its conclusion could be sensitive to the overall generation fleet mix and the level of penetration of behind-the-meter generation. To account for this, we replicated our analysis against the backdrop of two contrasting Future Energy Scenarios (FES) as set out by National Grid: Steady Progression and Community Renewables.
Our analysis formed part of the evidence for Ofgem’s draft impact assessment and was published alongside Ofgem’s minded-to decision papers. Click to access the draft assessment.
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How we can help
We can help our clients with a wide range of issues from whole system modelling to individual power plant and policy impact analysis.
Strategic advice aimed at maximising the benefits and minimising the risks associated with the Capacity Market and Contracts for Difference.
We advise on the optimal dispatch of assets within the wholesale market, forward planning of maintenance activities and valuation of commercial upgrades to plant.
We provide detailed forecasts of the GB and Irish power markets, using our EnVision modelling framework. This can provide both short-term and long-term forecasts of all key system metrics, from system wide to individual assets.
We work extensively in the Irish market, providing market modelling and analysis to investors, generation owners and governments.
Our understanding of market dynamics and modelling experience allow us to offer evidence-based recommendations on complex policy and regulatory issues that allow fully informed decision-making.
We combine bottom-up unit-level modelling with market and policy insights to quantify the value and understand the risk associated with any generation asset.