| answer text |
<p>Ofgem’s review of network charges for smaller generators (so called ‘embedded benefits’)
was prompted by concerns that current arrangements may over-reward smaller generators
at the expense of the end consumer and may distort competition, including within Capacity
Market auctions.</p><p>The timing of the review is a matter for Ofgem as independent
regulator. Ofgem has said that it will undertake a further consultation and impact
assessment in early 2017, with a final decision later in the year.</p><p>Ofgem published
an open letter in December 2016 which confirmed that none of the proposed modifications
would alter charges for 2017/18, the delivery year of the early Capacity Market auction,
and outlined a level of embedded benefits in future years that it would be prudent
for participants in the Capacity Market auctions to assume.</p><p>Departmental officials
will work with Ofgem as part of its assessment process to ensure that key Government
policy interests are taken into account, including aspects such as the potential impacts
on security of supply.</p>
|
|
