Report on structure of electricity distribution charges

Report (43 pages, PDF) prepared for Ofgem by the University of Bath and David Tolley estimating the effect of changing the method for setting charges for use of electricity distribution networks at 33kV and 132kV.

The study estimates the impact of charges on the growth and location of load and generation for a small hypothetical reference network. Its main finding is that a move to a LRIC approach might, in the case of the reference network used, allow a saving in investment costs of the order of £3 per kW of load, in present value over a period of 20 years (i.e. an annual saving of the broad order of 40-50 pence per household).

An accompanying Ofgem letter (2 pages, PDF) invites comments by Friday 24 February 2006.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, Ofgem.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

About Reckon