Monday 22 April 2024

Net zero has meant a compete reform of the distribution network, says expert

We spoke to Nick Tyson, Industry Forecast Manager for TotalEnergies who told us that there are a lot of changes to come in how businesses connect to the electricity network

The electricity industry is not getting any simpler.

This is what Nick Tyson, Industry Forecast Manager for TotalEnergies said in an interview with us.

Discussing the way the energy networks operate and charge businesses, Nick said there have been a lot of changes in recent times but plenty more will be on their way, as we transition to net zero and the effect this will have on the demands of the network.

He said: ‘Towards around 2016/17, Ofgem decided to completely reform the way everything is charged.

‘This is where they introduced the targeted charging review and the Access and Forward-Looking Charges Significant Code Review (Access SCR).

‘Their principles were to change costs to consumers to be fairer, proportional and practical.

‘They decided they would move the cost collection from the behavioural unit rates into a fixed daily charge.

‘One of the reasons for the change was that previously, if you were a flexible type customer and you were able to switch off during peak times, you could potentially switch off during the charging period and pay zero contribution for transmission charging.

‘But this wasn’t fair to all the customers who couldn’t be flexible.’

Nick told us that reaching net zero targets will be a big challenge for the distribution network.

‘Electric vehicles, for example, will really ramp up the need for capacity that’s coming down to the street level.

‘So there’s a huge challenge for the network on how they’re going to do that, with the infrastructure and the physical cables that are going to be required.

‘There is also a push from the industry to decentralise, so we can expect a distribution connected generation which will mean reinforcing the network and this will cost money.

‘With an expanding population and given that everyone is going to eventually transition from gas heating to electricity, all this will increase demand on the distribution network for capacity.’

Looking forward to the future, Nick said that although standing charges will fall in the coming years, overall costs will see an increase.

Watch the full episode below.

 

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