UK Energy Regulator Plans to Cut Payments to Embedded Generators

By Ian Walker Features Dow Jones Newswires

U.K. energy regulator Ofgem announced plans Tuesday to lower the payment that some small electricity generators receive for producing electricity at peak times by between 3 pounds ($3.80) and GBP7 a kilowatt over the next three years, as it believes the payment distorts wholesale and capacity markets.

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Currently, small energy generators with less than 100 megawatt capacity, get GBP47 a kilowatt from suppliers for helping them reduce charges to use the transmission network. This is in addition to the price these generators get for selling their electricity, Ofgem said, adding that the payment cost customers around GBP370 million last year.

Ofgem Chief Executive Dermot Nolan said: "We are concerned that the current level of the payment is distorting the market and is set to increase further."

"Our role is to protect customers and make sure costs are kept as low as possible. That is why we are taking action by reducing this payment."

-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

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June 20, 2017 04:05 ET (08:05 GMT)