Regen has been working with SP Energy Networks (SPEN) to understand the impacts of recent and proposed changes to how much we pay for our distribution and transmission network on customers, on Distribution Network Operators (DNOs) and on decarbonisation.
A detailed analysis was undertaken including modelling of network charge options and interviews with both stakeholders and SPEN’s connections team. This analysis has been summarised into a short report which can be viewed here.
The results of the analysis were presented around four key themes that were expected to have the most significant implications for both SPEN and their network customers:
- Higher fixed charges for demand customers due to the shift from variable to flexible costs, particularly those with low capacity utilisation.
- Locational charges and forward price signals could have significantly impacts on locational and regional aspirations for growth and decarbonisation.
- Shallower distribution connection boundary could make it cheaper for distribution sites in constrained locations to connect to the network, particularly large sites.
- Flexible access and connections options would be welcome, but questions remain as to how they will relate to DSO and other flexibility.
The report concludes that the proposed changes are mixed for decarbonisation and that the final impact will vary across the country and depend on how the methodologies are developed and applied. However, it is likely that it will require all DNOs to further invest in physical assets, network monitoring as well as processes and capability to support net zero, new connections and flexibility.
Read a summary of the report’s key findings in our blog here, written by Poppy Maltby (head of cities and regions).