Transmission charging: an out-dated cost-recovery framework distorts the market

Transmission charging is far from simple even in the traditional model of electricity networks, as illustrated by the diagram below. In principle, the costs of bringing electricity from large units of generation to consumers is socialised across users via three main tariffs: Transmission Use of System Charges (“TNUoS”), Balancing Services Use of System Charges (“BSUoS”) and…

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National Grid skirts calls for an independent system operator…for now

Last summer the House of Commons Energy and Climate Committee raised questions about the conflicts of interest inherent in National Grid’s role as the electricity system operator and recommended that the government should create an independent SO to mitigate these concerns (described in my previous blog post here). Not surprisingly, National Grid was opposed to…

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IFA outage: so far in 2017 this does look like a good thing

Last month I wrote about the IFA outage and suggested that the historic trend of exporting in periods of high UK demand might mean the outage is positive for UK capacity margins. So far 2017 has seen some significant system tightness, with a number of plants being offline (EDF even has several nuclear reactors out…

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IFA outage: a blessing in disguise?

In my last post I commented on the impact low nuclear output in France could have on the UK electricity market, noting that if the interconnector switches to export mode, there would be a 4 GW net effect on UK capacity margins. Since then we have seen the news that due to damage sustained during…

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Do we need an independent system operator?

Calls are growing for the UK electricity system to be managed by an independent system operator (“ISO”) whose activities are separate from the ownership of the wires themselves. Such a change would require nationalisation of the system operation activities of National Grid, and the creation of a new regulatory framework for the electricity system. This would…

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EFR: what we learned from the first auction

The first auction for enhanced frequency response (“EFR”) in the UK closed at the end of August, with just over 200 MW being secured by National Grid under 4-year contracts, at unexpectedly low prices. All of the winning sites were as yet un-built battery storage projects, and there were a significant number of similar projects…

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Transmission matters: it’s not just about capacity

Transmission systems are key to delivering security of supply and yet tend to be treated as an afterthought – note for example Germany’s massive deployment of renewables in the north of the country without a corresponding investment in the necessary transmission capacity to deliver it to the demand centres in the south. As noted in my…

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