Ofgem rejects P224 (allocation of reactive power)

Ofgem decision (7 pages, PDF) to reject BSC modification proposal P224 which would have changed the rules for recording data about reactive power flow in sites shared between generation and demand. This would affect distribution charges (which generation and demand users pay separately).

The rejection, against a unanimous BSC panel recommendation in favour of the change, is on the grounds that Ofgem “has concerns that these benefits have not been sufficiently proved in this case”, “considers that there remains a further gap in the analysis” and thinks that “the materiality of the benefit remains unproven”.

The decision states that the change would lead to a “significant reduction” in distribution charges for the load, and a “very modest increase” for the generator. This implies that total distribution charges for the site would be reduced by the proposal, presumably leading to higher distribution charges across the board (not just for shared sites) so as to recover distribution price control revenues. However, no such effect is highlighted, or relied upon, in the decision.

Unusually for a BSC modification, the decision is signed by the Ofgem director responsible for the regulation of electricity distribution networks.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, Ofgem.

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