Utility Week

26 | JUNE 2022 | UTILITY WEEK Electricity distribution Analysis Ofgem rules on new DNO connections regime After three years, Ofgem has issued its final decisions on changing the DNO connections regime to make it more friendly for those wanting to invest in new low-carbon generation. A t the beginning of May, Ofgem closed off another chapter in the long-run- ning saga over reforms to network charging with its final decision on its Signifi- cant Code Review (SCR) of network access arrangements. Since being launched in December 2018, the scope of the review has changed sub- stantially, having originally covered the forward-looking network charges that are intended to reflect users' impact on future investment depending on where they con- nect to the network. These forward-looking charges are in contrast to the residual charges designed to recover the remaining "sunk" costs of the network, which were subject to an earlier SCR known as the Targeted Charging Review launched in August 2017. The TCR concluded in November 2017 with Ofgem's decision to levy residual charges solely on demand in the form of fixed banded fees, while also drastically reducing the advantageous charges arrange- ments known as "embedded benefits" that had been available to distributed generators. In its minded-to decision on the network access SCR in June 2021, Ofgem said it had paused work on forward-looking Distribu- tion Use of System (DUoS) charges to enable alignment with other reforms being con- sidered as part of its Full Chain Flexibility programme launched in late 2020. It also laid out plans to expose smaller distributed generators to wider forward-looking Trans- mission Network Use of System (TNUoS) charges. The following November, Ofgem announced plans to hold a third separate SCR dedicated to forward-looking DUoS charges. And then in January this year, the regula- tor paused its plans to apply wider forward- looking TNUoS charges to smaller distributed generators a"er receiving opposition from a "large majority" of respondents to its consul- tation on the minded-to decision. It gave a further update in February, announcing that National Grid would be instructed to launch and lead one or more taskforces to examine and address the root causes of the unpredictability and volatility of TNUoS charges that many in the industry complained about. Ofgem said this would enable it to make some short-term fixes while it undertakes a "significant programme of work" to exam-

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