To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the potential effect of reducing the level of embedded benefit on the cost of the capacity market in (a) 2016, (b) 2017 and (c) 2018.
16 November 2016
Network charging is a matter for Ofgem, as the independent regulator, and it is leading the review of embedded benefits related to Transmission Network Use of System charges. The Department has received a number of stakeholder representations regarding embedded benefits, and we have made Ofgem aware of these. Proposals for changing the embedded benefits regime are currently being progressed through an open industry process, and it is likely that Ofgem will undertake a further consultation and impact assessment in early 2017, but will make a decision on approach when they receive the final modification report. We will engage with Ofgem as part of its assessment process to ensure that Government policy interests are taken into account, including aspects such as the potential effect of reducing the level of embedded benefits on the renewable energy sector, electricity storage, household and business electricity costs (including industrial manufacturing), and security of supply.