Distributed generation: price controls, incentives and connection charging




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02 May 2002



Regulation





The National Grid Company plc

National Grid House

Kirby Corner Road

Coventry

CV4 8JY

Tel No: 024 7642 3943

Fax No: 024 7642 3945








Arthur Cooke

Distributed Generation Co-ordinator

Ofgem

9 Millbank



London

SW1P 3GE




Dear Arthur


Distributed generation: price controls, incentives and connection charging
We have read the March consultation paper, “Distributed generation: price controls, incentives and connection charging – Further discussion, recommendations and future action”, with interest and would like to take this opportunity to provide you with our comments.
The paper proposes a number of initiatives to overcome entry barriers to prospective distributed generators. We support this aim and, while the practical issues associated with the different networks need to be recognised, we believe a consistent and compatible framework for system access and the provision of network services should exist between the distribution and transmission systems. Such a framework should facilitate the exchange of services and access to the wider markets for all parties, regardless of the level at which they connect.
However, while we note that the March proposals move the distribution networks closer to National Grid’s current charging arrangements, Ofgem has recently published revised Transmission Access proposals which would lead to substantial change in current transmission arrangements. Compatibility and consistency of the principles underlying transmission and distribution access will be important in ensuring barriers are removed on an enduring basis and it is therefore important that Ofgem’s transmission access proposals are taken into account in considering changes to the distribution framework.
We also note the paper discusses the possibility that embedded generators may provide ancillary services to distribution networks. On this issue, there needs to be consistency between services offered by embedded generators and the services already provided by transmission connected generators, in particular, the framework for their provision should be compatible with National Grid’s balancing services incentive arrangements and our BSUoS charging framework.
Please contact me if you wish to discuss any of these matters further.
Yours sincerely,

Tim Tutton

Director of Regulation




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