Rachel Hayes, director of ESN, highlights the importance of Ofgem’s decision to include energy storage in the electricity generation licence.
Ofgem has released their decision on clarifying the regulatory framework for electricity storage.
For many years the Electricity Storage Network has strongly argued for a definition that recognises storage technologies. You can see our paper from summer 2019 here.
Ofgem has today confirmed that they will define electricity storage as a subset of generation and amend the generation license accordingly. This is in line with their ‘minded to’ position from earlier this year.
Changes to the electricity generation licence include:
- a definition of ‘electricity storage’ and ‘electricity storage facility’ in the electricity generation licence; and
- a new licence condition, E1, in the generation licence applicable only to generation licence holders that operate/own storage. This condition would require the licensee to provide accurate information regarding their electricity storage facility to their relevant suppliers. The purpose of this condition is to enable the correct identification of facilities operating under licence as electricity storage, the correct calculation of relevant charges by suppliers and to ensure that suppliers are able to report accurately against their own obligations.
These changes will ensure that electricity storage is subject to the same rules and regulations in the licensing regime as other forms of generation, and they will address current issues storage providers face surrounding final consumption levies (where some providers currently face double-charging of such levies).
You can see the full details in the letter from Ofgem here
