Ofgem has launched a new strategy for regulating the future energy system.
This sets out a regulatory approach to keep pace with major changes in how the UK is generating and using energy.
As part of this strategy, Ofgem has also published a decision to carry out a significant code review looking into certain aspects of charging for using the power networks.
Andrew Wright, senior partner in energy systems, wrote a blog on the changes.
He laid out the principles as:
-Aligning incentives, so that monopoly network operators and National Grid as the gas and electricity system operator act in the interests of consumers.
-Cost reflective charges for monopoly services that reflect the incremental costs and benefits of how consumers and other parties use the system. This includes minimising harmful distortions arising from the recovery of residual charges for using the networks.
-A level playing field, so that all technologies and business models can compete equally, without barriers to entry to the market.
-Efficient allocation of risk, so that those best placed to manage the uncertainty inherent in a rapidly changing system shoulder the risks involved.
-Harnessing markets and competition where it can bring benefits to consumers.
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