Memorandum submitted by Consumer Focus (FBEN 22)

 

 

Executive summary

 

• Consumer Focus welcomes the Energy and Climate Change Committee (ECCC) inquiry into the future of Great Britain's (GB) electricity networks.

 

• GB is facing significant challenges in the development of our energy infrastructure to meet the demands of current and future consumers and our environmental obligations. It is essential that the interests of and impact on consumers are put at the heart of policy and planning debates and decisions.

 

• Consumers pay different network charges depending on where they live. With major changes ahead now is the time to investigate whether it is in the best interests of consumers to continue with regional charging or move to national charging.

 

• Investment costs will be significant. A number of broad estimates have been identified but it is unclear what proportion of the costs will be borne by shareholders and consumers. It is essential that we have clarity on the cost impact on an individual household and what consumers will see in return.

 

• Any increase in electricity bills will put further pressure on household budgets. We need to ensure there are adequate protections in place for the least affluent in our society.

Background

 

1. Consumer Focus is a brand new organisation which champions the needs of consumers across England, Wales, Scotland and, for postal services, Northern Ireland. We want to see consumers at the heart of business and government decision making. We have the power to take action where markets are failing consumers and to ensure a fair deal for all - especially the vulnerable and disadvantaged.

 

Introduction

 

2. GB is facing significant challenges in the development of our energy infrastructure to meet the demands of current and future consumers and our environmental obligations. The issues that need to be addressed are:

 

· Generating capacity equivalent to almost a third of current electricity demand will be redundant by 2020 and needs to be replaced.

· The current economic climate has affected demand, household budgets and finance for investment.

· The EU targets, which call for a 20 per cent reduction on greenhouse gas emissions and 20 per cent of final energy consumption from renewable sources by 2020[1].

· Consumers need to be at the heart of the policy and planning debate and decision making. We need to understand the social and economic consequences on households.

 

Investment costs

 

3. The costs involved in developing our energy infrastructure and meeting environmental obligations are significant. The Department of Energy and Climate Change (DECC) and Ofgem Electricity Networks Strategy Group estimate investment costs of up to £4.7 billion to accommodate new power generation by 2020[2]. A report by Ernst and Young commissioned by Centrica estimate that the energy industry will need to invest £234bn by 2025 to maintain security of supply and to reach governmental targets for the industry (includes new wind farms, nuclear power stations and grid connections)[3].

 

4. It remains unclear what proportion of the required investment costs will be borne by shareholders and consumers. It is essential that we have clarity about the cost impact on an individual household and what consumers will see in return. Consumers need secure and diverse supplies at a fair and affordable price. Any increase in bills will put further pressure on household budgets. We need to ensure there are adequate protections in place for the least affluent in our society.

 

5. Socials tariffs are a means to provide protection for the most vulnerable consumers and a means to provide help to households facing high fuel bills. Consumer Focus supports the Fuel Poverty Bill currently being considered by Parliament. The Bill will also require energy suppliers to offer tariffs at a rate lower than any existing market tariff to certain prescribed consumers such as vulnerable and low income households. This would limit their exposure to high energy bills.

 

6. The Fuel Poverty Bill will enhance the use of energy efficiency measures to tackle fuel poverty. The Bill:

 

· Puts energy efficiency centre stage in the battle against fuel poverty.

· Stipulates that homes must be brought up to a measurable energy efficiency level so they are 'fuel poverty proofed' and household energy bills can be reduced by up to 70 per cent.

· Mandates that social tariffs are provided until homes are 'fuel poverty proofed'.

 

7. Other initiatives such as demand side management and more innovative technologies that could be used locally should be investigated as potential strategies to help reduce the amount of large scale investment required.

 

8. Any investment in networks needs to ensure that micro and community generation has the access it needs to export unused electricity, in order to facilitate direct consumer and community investment in renewable technology. Consumer Focus is undertaking work on the role feed in tariffs can play in promoting renewable technology including funding arrangements.  Without affordable and timely access to the grid, consumers and communities will become disenchanted with the Government's renewable energy strategy and the part that they can play in it.

 

Network charging

 

9. Over the past six years, consumers have seen their electricity bills rise by 94 per cent pushing millions of households into fuel poverty. Some 5.4 million households were estimated to be in fuel poverty this winter[4]. Consumers pay different charges for their electricity depending on where they live in GB (a map of the distribution network operators across GB by supply region is provided in Annex A). Consumers in Scotland and Wales typically pay more in electricity network charges than consumers in England.

 

10. Single rate meter consumers in the Scottish Hydro and Swalec regions pay network charges 16 per cent and 17 per cent respectively above average GB levels. Only one region in England, SWEB, has higher network costs than the Scottish Power region. Network charges in the Scottish Power region are 10 per cent above the GB average, while those in the Scottish Power Manweb region are the ninth highest from the 14 supply regions at 3 per cent above the GB average. Annex B Table 1 provides indicative network charges for a single rate meter medium user (annual consumption of 3,300kWh) from 1 April 2009 ranked from cheapest to most expensive.

11. For Economy 7 users, network charges in both Scotland and Wales areas are also above the GB average and provide four of the five most expensive charging regions. Charges in the Hydro Electric and Scottish Power regions are both 18 per cent above the GB average. Those in the Swalec and Scottish Power Manweb regions are also 20 per cent and 6 per cent above. Annex B Table 2 provides indicative network charges for an Economy 7 meter medium user (annual consumption of 6,600kWh) from 1 April 2009 ranked from cheapest to most expensive.

 

12. In all cases the reasons for the premia to GB average levels are higher distribution use of system (DUoS) charges. Network charges are to increase by around 5% at 1 April 2009 compared with 1 April 2008 averaged across Great Britain. This move follows an increase of a similar magnitude in charges in force at 1 April 2008 compared with those in force at 1 April 2007. Above average increases for use of the transmission system are being levied in Scotland for 1 April 2009, a trend consistent from 1 April 2008, while above average DUoS charge increases are expected in both Scottish Power and Scottish Power Manweb supply regions for 1 April 2009. This again is a trend consistent from 1 April 2007. For further information refer to Annexe C for a copy of the unpublished report 'The Costs to Consumers of Electricity Network Charges', commissioned by Consumer Focus. This document updates a report from our predecessor, energywatch, which commissioned a review of domestic electricity prices in Wales and compared prices with other areas of GB in April 2008 [5].

 

13. Following campaigning by consumer organisations, the Government agreed to retain special protections for consumers in areas with high distribution costs. Consumers in the Hydro Electric region currently receive a cross subsidy from consumers across the whole of GB to help offset the significantly higher costs of distribution that they face[6].

 

14. It is important to remember that the vast majority of consumers are passive users of the network and unable to respond to pricing signals. We question whether consumers understand the extent to which network charges affect the price they pay for their electricity and even if they were aware of the breakdown of their bill whether they would be able to respond to such a locational signal. For example, a domestic consumer is more likely to consider rental/housing prices, distance from work, surroundings and schools rather than the network charges when deciding where to live.

 

15. Significant investment is going to be required for GB to meet its environmental obligations. It has yet to be determined how the investment costs will be covered. Given these are national obligations and that consumers in parts of GB pay significantly higher network charges, now is the time to investigate whether it is in the best interests of consumers to continue with regional charging or move to national charging for domestic consumers[7]. Consumer Focus plans to commission an analysis of national versus regional charges for domestic consumers which we would be happy to share with the Committee once completed. This work will consider the social, economic and behavioural impact on domestic consumers.

 

March 2009

 

 

 

Annex A: Electricity distribution network operators in GB by supply region

 

Annex B - Indicative network charges for domestic consumers

 

Table 1: Indicative network charges 1 April 2009 -medium user single rate meter

Supply region	Transmission	Distribution	HDCA	BSUoS	All network charges	All £	Rank
Seeboard	0.44	1.52	0.01	0.16	2.13	70.30	1
East Midlands	0.35	1.65	0.01	0.16	2.18	71.81	2
Eastern	0.36	1.68	0.01	0.16	2.21	72.99	3
Midlands	0.39	1.71	0.01	0.16	2.28	75.08	4
Norweb	0.30	1.80	0.01	0.16	2.28	75.15	5
London	0.43	1.69	0.01	0.16	2.30	75.76	6
Yorkshire	0.30	1.86	0.01	0.16	2.34	77.22	7
Northern	0.23	2.05	0.01	0.16	2.45	80.98	8
ScottishPowerManweb	0.29	2.15	0.01	0.16	2.62	86.44	9
Southern	0.43	2.02	0.01	0.16	2.63	86.78	10
ScottishPower	0.16	2.54	0.01	0.16	2.88	94.88	11
SWEB	0.46	2.30	0.01	0.16	2.93	96.76	12
ScottishHydro	0.07	2.82	0.01	0.16	3.06	101.01	13
Swalec	0.42	2.49	0.01	0.16	3.08	101.80	14
Average	0.33	2.02	0.01	0.16	2.53	83.35

 

Table 2: Indicative network charges 1 April 2009 - medium user Economy 7 meter

Supply region	Transmission	Distribution	HDCA	BSUoS	All network charges	All £	Rank
Eastern	0.18	1.12	0.01	0.16	1.47	97.15	1
Norweb	0.15	1.17	0.01	0.16	1.49	98.52	2
Seeboard	0.21	1.11	0.01	0.16	1.50	98.81	3
East Midlands	0.17	1.17	0.01	0.16	1.51	99.95	4
Midlands	0.19	1.21	0.01	0.16	1.57	103.56	5
Yorkshire	0.15	1.29	0.01	0.16	1.62	106.69	6
Southern	0.21	1.28	0.01	0.16	1.66	109.69	7
London	0.21	1.30	0.01	0.16	1.68	111.13	8
Northern	0.11	1.41	0.01	0.16	1.70	112.12	9
ScottishPowerManweb	0.14	1.63	0.01	0.16	1.94	128.35	10
SWEB	0.22	1.82	0.01	0.16	2.22	146.43	11
ScottishHydro	0.03	2.01	0.01	0.16	2.22	146.52	12
ScottishPower	0.08	1.98	0.01	0.16	2.23	147.17	13
Swalec	0.21	1.89	0.01	0.16	2.27	149.84	14
Average	0.16	1.46	0.01	0.16	1.79	118.28

Source: Grid charges 2009 paper fro Consumer Focus by Cornwall Energy, March 2009

 

Annex C

 

The Costs to Consumers of Electricity Network Charges

A comparison of the position at 1 April 2009 on 1 April 2008 by Cornwall Energy

 

16. This short paper has been prepared by Cornwall Energy for Consumer Focus in support of the summary numerical analysis we have also prepared of the annualised costs of electricity network use of system charges effective at 1 April 2009 in comparison with those at 1 April 2008 and 1 April 2007. The purpose of the paper is to highlight the changes in network charges applied to consumers in Wales and Scotland compared with those in England.

 

17. Reflecting the Consumer Focus definition of a "Medium user," we have considered charges regionally as applied to annual consumptions of 3.3MWh for single rate meters and 6.6MWh for Economy 7/Off Peak meters. The results of this analysis are presented in summary form by supply region highlighting key differences.

Key findings

 

18. Scottish and Welsh consumers typically pay more for in electricity network charges than their counterparts in England. According to schedules in force at 1 April 2009, single rate meter consumers in the Scottish Hydro and Swalec regions pay network charges 16% and 17% respectively above average Great Britain levels. Only one region in England, SWEB, has higher network costs than the Scottish Power region. Network charges in the Scottish Power region are 10% above the Great Britain average, while those in the Scottish Power Manweb region are the ninth highest from the 14 supply regions at 3% above the Great Britain average.

 

19. For Economy 7 users, network charges at 1 April 2009 in both Scottish and Welsh areas are also above the Great Britain average and provide four of the five most expensive charging regions. Charges in the Hydro Electric and Scottish Power regions are both 18% above the Great Britain average, those in the Swalec and Scottish Power Manweb regions are also 20% and 6% above.

 

20. In all cases the reasons for the premia to Great Britain average levels are higher distribution use of system (DUoS) charges.

 

21. Network charges are to increase by around 5% at 1 April 2009 compared with 1 April 2008 averaged across Great Britain. This move follows an increases of a similar magnitude in charges in force at 1 April 2008 compared with those in force at 1 April 2007.

 

22. Above average increases for use of the transmission system are being levied in Scotland for 1 April 2009, a trend consistent from 1 April 2008, while above average DUoS charge increases are expected in both Scottish Power and Scottish Power Manweb supply regions for 1 April 2009. This again is a trend consistent from 1 April 2007.

 

Network charging

 

23. The delivery of electricity through the transmission and distribution grids to consumer meters is not competitive, and a number of companies operate localised or regional monopoly services providing these functions. National Grid operates and charges for use of the transmission system in Great Britain (which in turn is owned regionally by three asset owners) which deals with the bulk transfer of power across Britain. Seven distribution network operators (DNOs) own and operate 14 regional distribution systems, which distribute the power at lower voltage to businesses and homes. Network use is provided on a non-discriminatory, open access basis according to charges that are published using methodologies agreed with the regulator, Ofgem.

 

24. We have compared the published charges that will be current at 1 April 2009 against those applied from 1 April 2008 as follows:

· Transmission network use of system charges (TNUoS) vary by supply region. We have applied the p/kWh charge regionally on the assumption that the average single rate meter consumer uses 14.3% (472kWh of 3,300 kWh) and the average Economy 7 user 7% of their electricity during the period specified by National Grid over which charges are set[8]. We have applied the appropriate volume calculations to the use of system charges as published by National Grid[9]

· Balancing services use of system charges (BSUoS) are common regardless of location. We have assumed annualised charges of 0.15p/kWh for 1 April 2008 consistent with the latest information from National Grid on BSUoS costs for the 2008-09 financial year[10]. Information on the incentive to be applied to National Grid to manage these costs in 2009-10 indicates BSUoS costs in the 2009-10 year could be of the order of 0.16p/kWh, although they may possibly range as high as 0.18p/kWh. We have applied an assessment of BSUoS of 0.16p/kWh for the 1 April 2009 cost estimates. We are also aware of proposals to regionalise BSUoS costs but have not factored their potential impact in to our work.

· Distribution use of system charges (DUoS) also vary by supply region. We have calculated a total cost from charging information for each region according to information collated by the Energy Networks Association.[11]

· The regulated charge for assistance for areas with high electricity distribution costs (HDCA)[12] is common regardless of location. We have assumed an annualised on-cost of 0.014616p/kWh as applied for the 2008-09 charging year in the absence of the rate yet being confirmed for the 2009-10 charging year.

25. TNUoS and DUoS charges vary regionally reflecting the different characteristics and operating costs of the 14 regional networks. They also vary regionally for transmission as the charging structure is intended to reflect costs being driven by the primary flow on the network of shifting bulk power from the north of Great Britain to its south. BSUoS and HDCA charges are common regardless of location as the former reflects the costs of keeping the national transmission network in balance and the latter a political decision to collect some of the extra costs of distribution in the Scottish Hydro region from consumers throughout Great Britain[13].

 

Level of charges

 

26. Network charges at 1 April 2009 for single rate meter consumers in the Scottish Hydro and Swalec areas are the highest of all 14 supply regions. Charges in these regions are 16% and 17% respectively above average Great Britain levels. The key contributor to the differentials are DUoS charges which are respectively 40% and 23% above the Great Britain average. Only one region in England, SWEB, has higher network costs than the Scottish Power region. Network charges in the Scottish Power region are 10% above the Great Britain average, with the key contributor DUoS costs some 26% above the Great Britain average. Scottish Power Manweb regional network charges are the ninth highest from the 14 and also above average by some 3% due to DUoS charges 7% above the Great Britain average. Table 3 below illustrates.

 

27. For Economy 7 users, network charges in both Scottish and Welsh areas are also above the Great Britain average and provide four of the five most expensive charging regions. Charges in the Hydro Electric and Scottish Power regions are both 18% above the Great Britain average, due to DUoS charges in each region that are 38% and 36% respectively above Great Britain average DUoS charges. Network charges in the Swalec and Scottish Power Manweb regions are also 20% and 6% above the Great Britain average respectively due to DUoS charges 36% and 12% above the Great Britain average DUoS charge. Table 4 provides more information.

 

 

Table 3: Indicative network charges 1 April 2009
-medium user single rate meter

Supply region	Transmission	Distribution	HDCA	BSUoS	All network charges	All £	Rank
Seeboard	0.44	1.52	0.01	0.16	2.13	70.30	1
East Midlands	0.35	1.65	0.01	0.16	2.18	71.81	2
Eastern	0.36	1.68	0.01	0.16	2.21	72.99	3
Midlands	0.39	1.71	0.01	0.16	2.28	75.08	4
Norweb	0.30	1.80	0.01	0.16	2.28	75.15	5
London	0.43	1.69	0.01	0.16	2.30	75.76	6
Yorkshire	0.30	1.86	0.01	0.16	2.34	77.22	7
Northern	0.23	2.05	0.01	0.16	2.45	80.98	8
ScottishPower Manweb	0.29	2.15	0.01	0.16	2.62	86.44	9
Southern	0.43	2.02	0.01	0.16	2.63	86.78	10
ScottishPower	0.16	2.54	0.01	0.16	2.88	94.88	11
SWEB	0.46	2.30	0.01	0.16	2.93	96.76	12
ScottishHydro	0.07	2.82	0.01	0.16	3.06	101.01	13
Swalec	0.42	2.49	0.01	0.16	3.08	101.80	14
Average	0.33	2.02	0.01	0.16	2.53	83.35

 

Table 4: Indicative network charges 1 April 2009
-medium user Economy 7 meter

Supply region	Transmission	Distribution	HDCA	BSUoS	All network charges	All £	Rank
Eastern	0.18	1.12	0.01	0.16	1.47	97.15	1
Norweb	0.15	1.17	0.01	0.16	1.49	98.52	2
Seeboard	0.21	1.11	0.01	0.16	1.50	98.81	3
East Midlands	0.17	1.17	0.01	0.16	1.51	99.95	4
Midlands	0.19	1.21	0.01	0.16	1.57	103.56	5
Yorkshire	0.15	1.29	0.01	0.16	1.62	106.69	6
Southern	0.21	1.28	0.01	0.16	1.66	109.69	7
London	0.21	1.30	0.01	0.16	1.68	111.13	8
Northern	0.11	1.41	0.01	0.16	1.70	112.12	9
ScottishPower Manweb	0.14	1.63	0.01	0.16	1.94	128.35	10
SWEB	0.22	1.82	0.01	0.16	2.22	146.43	11
ScottishHydro	0.03	2.01	0.01	0.16	2.22	146.52	12
ScottishPower	0.08	1.98	0.01	0.16	2.23	147.17	13
Swalec	0.21	1.89	0.01	0.16	2.27	149.84	14
Average	0.16	1.46	0.01	0.16	1.79	118.28

 

 

Charge changes

 

28. TNUoS and DUoS charges to apply at 1 April 2009 for the medium user are generally higher than those in force 12 months earlier. Increases average around 6% for both TNUoS and DUoS charges.

 

29. However TNUoS charge increases in both the Scottish regions are above average for both user types, while above average DUoS charge increases have been implemented in both Scottish Power and Scottish Power Manweb supply regions. For each of the four Scottish and Welsh regions the following charge changes have been finalised for 1 April 2009:

· Annualised transmission costs in the Scottish Hydro area (North of Scotland) will rise by 3% and distribution charges by 23%. The transmission increase is above the Great Britain average of 6% but in absolute terms these costs remain much the lowest of the 14 regional charges. Distribution charges remain the highest levied in the 14 supply regions.

· Annualised transmission costs in the Scottish Power area (South of Scotland) will rise by 8% and distribution charges by 12%. The transmission increase is also above the Great Britain average of 6% but again in absolute terms these costs are below the Great Britain average. Distribution charges remain the second-highest levied in the 14 supply regions.

· Annualised transmission costs in the Scottish Power Manweb area (Merseyside and North Wales) will remain stable but distribution charges are increasing by 14%. The transmission change is below the Great Britain average increase of 6% and costs are slightly below the Great Britain average. Distribution charges are the fifth-highest levied in the 14 supply regions and above the Great Britain average.

· Annualised transmission costs in the Swalec area (South Wales) will remain stable and distribution charges are rising by 4-5%. The transmission change is below the Great Britain average increase of 6% but costs are a fifth above the Great Britain average. Distribution charges are the third-highest levied in the 14 supply regions and above the Great Britain average.

30. Tables 5, 6, 7 and 8 overleaf illustrate. Tables 5 and 6 compare changes in charges effective 1 April 2009 with those applicable a year earlier for respectively single rate and Economy 7 users. Tables 7 and 8 show similar comparative information for 1 April 2008 charges against those in force at 1 April 2007. They are followed by a short supplementary note on the structure of British electricity networks.

 

 

 

Table 5: Indicative network charge changes 1 April 2009 on 1 April 2008
-medium user single rate meter

 

Supply region	Transmission	Distribution
ScottishPower Manweb	-0.4%	13.9%
ScottishPower	8.4%	11.7%
SWEB	-0.5%	8.0%
Midlands	6.4%	7.7%
Southern	2.8%	7.1%
Yorkshire	9.9%	6.8%
Swalec	-0.1%	5.1%
London	0.7%	4.8%
Seeboard	7.4%	4.4%
East Midlands	5.4%	3.2%
ScottishHydro	23.4%	3.2%
Northern	12.2%	1.4%
Eastern	2.1%	1.2%
Norweb	7.1%	-6.7%
Average	6.1%	5.1%

 

Table 6: Indicative network charge changes 1 April 2009 on 1 April 2008
-medium user Economy 7 meter

 

Supply region	Transmission	Distribution
Yorkshire	9.9%	17.2%
Northern	12.2%	16.2%
ScottishPower Manweb	-0.4%	13.8%
ScottishPower	8.4%	11.9%
Midlands	6.4%	8.2%
SWEB	-0.5%	7.9%
Southern	2.8%	7.1%
London	0.7%	5.5%
Swalec	-0.1%	4.4%
East Midlands	5.4%	4.2%
Seeboard	7.4%	4.2%
ScottishHydro	23.4%	3.2%
Eastern	2.1%	1.1%
Norweb	7.1%	-12.0%
Average	6.1%	6.6%

 

 

 

Table 7: Indicative network charge changes 1 April 2008 on 1 April 2007
-medium user single rate meter

 

Supply region	Transmission	Distribution
ScottishPower Manweb	-0.4%	13.9%
ScottishPower	8.4%	11.7%
SWEB	-0.5%	8.0%
Midlands	6.4%	7.7%
Southern	2.8%	7.1%
Yorkshire	9.9%	6.8%
Swalec	-0.1%	5.1%
London	0.7%	4.8%
Seeboard	7.4%	4.4%
East Midlands	5.4%	3.2%
ScottishHydro	23.4%	3.2%
Northern	12.2%	1.4%
Eastern	2.1%	1.2%
Norweb	7.1%	-6.7%
Average	6.1%	5.1%

 

Table 8: Indicative network charge changes 1 April 2008 on 1 April 2007
-medium user Economy 7 meter

 

Supply region	Transmission	Distribution
Yorkshire	9.9%	17.2%
Northern	12.2%	16.2%
ScottishPower Manweb	-0.4%	13.8%
ScottishPower	8.4%	11.9%
Midlands	6.4%	8.2%
SWEB	-0.5%	7.9%
Southern	2.8%	7.1%
London	0.7%	5.5%
Swalec	-0.1%	4.4%
East Midlands	5.4%	4.2%
Seeboard	7.4%	4.2%
ScottishHydro	23.4%	3.2%
Eastern	2.1%	1.1%
Norweb	7.1%	-12.0%
Average	6.1%	6.6%

 

 

Electricity Networks in Great Britain-Supplementary note

 

31. Electricity is shipped from power stations to consumers through a core national transmission system and 14 regional distribution networks. Suppliers pay the operators of these networks for the use made of them by the consumers they supply. In turn suppliers account for these charges as part of their bills to consumers.

 

32. The transmission network is operated by a single company-National Grid-but with assets under different ownership north and south of the border. National Grid also owns the transmission network of 275kV and 400kV wires in England and Wales while Scottish Power and Scottish Hydro own the networks respectively in southern and northern Scotland. North of the border 132kV wires are also classified as transmission rather than distribution assets.

 

33. The mechanism applied to collect TNUoS charges from suppliers for smaller users including households is based on demand zones that correspond to the distribution charging regions.

 

34. DUoS charges are applied to cover the costs of moving power from the national transmission system to the customer's meter through the local distribution networks. As with TNUoS, charges for each of the 14 distribution network regions in Great Britain are regulated by Ofgem. Distribution tariffs vary regionally, and also according to the voltage level at which the customer is connected and the metering configuration at the site. Typically, DUoS charges consist of a standing charge and a consumption charge. The consumption charge may consist of several unit rates, especially for sites where metering records data for more than one time block.

---

[1] The UK target is 15 per cent (see paragraph 3 of the House of Lords report on the EU targets at http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/175/175.pdf) but the Government's aspiration is to deliver 20 per cent by 2020 (see http://www.berr.gov.uk/energy/sources/renewables/index.html).

[2] http://www.berr.gov.uk/files/file50333.pdf.

[3] Ernst and Young report refer to: http://www.ft.com/cms/s/0/e588b736-01db-11de-8199-000077b07658.html?nclick_check=1

[4] Refer to Consumer Focus media release on 18 March 2009. Go to: http://consumerfocus.org.uk/en/content/cms/News___Press/Winter_bills_leave_4/Winter_bills_leave_4.aspx

 

 

 

[5] The 2008 report can be found at: http://collections.europarchive.org/tna/20080922203044/http://www.energywatch.org.uk/uploads/Welsh_household_electricity_prices_April_2008.pdf

[6] http://www.nationalgrid.com/NR/rdonlyres/0A386108-C4D9-416E-B950-439EB609C67C/24712/AAHEDCdrafttariffs.pdf. The high electricity distribution costs charge (HDCA) is levied on all consumers in GB. Previously these costs were recovered through the former Hydro Benefit from Scottish and Southern Energy's generation business before the introduction of Betta in April 2005. Its annual value is approximately £50mn or around 0.7p/kWh distributed in the Hydro Electric region. Without it 1 April 2009 DUoS charges to the Economy 7 user would be 80% higher than the Great Britain average in the Hydro-Electric region (against 38%) and 70% higher for the single rate user (against 40%).

[7] The charging arrangements that are appropriate for domestic consumers may differ from the charging arrangements that are appropriate for generators who may be better placed to respond to locational pricing signals.

[8] The transmission network use of system tariff for small, non half hourly metered consumption is based on the annual energy consumption during the period 16:00 hrs to 19:00 hrs over the relevant financial year.

[9] http://www.nationalgrid.com/NR/rdonlyres/8B87819C-F80C-450D-8AC3-B0C16F606F3C/31609/FinalTariffs2009_2010.xls

[10] http://www.nationalgrid.com/NR/rdonlyres/A9F8774E-8CAB-4BEA-9605-5AA05DC0FEE9/32267/Feb2009_01_Ops_Update.pdf

[11] http://2009.energynetworks.org/use-of-system-charges

[12] This charge levied on all consumers in Great Britain provides revenues which are used to offset high distribution costs in the North of Scotland. http://www.nationalgrid.com/NR/rdonlyres/0A386108-C4D9-416E-B950-439EB609C67C/24712/AAHEDCdrafttariffs.pdf

[13] These costs were recovered through the former Hydro Benefit from Scottish and Southern Energy's generation business before the introduction of Betta in April 2005. Its annual value is approximately £50mn or around 0.7p/kWh distributed in the Hydro Electric region. Without it 1 April 2009 DUoS charges to the Economy 7 user would be 80% higher than the Great Britain average in the Hydro-Electric region (against 38%) and 70% higher for the single rate user (against 40%).