Tackling TNUoS: recognition of a review is welcome, but what we need now is action

We submitted a response last week to Ofgem’s Access and Forward Looking Charges Significant Code Review (SCR) consultation, sharing our views on its proposals for transmission charging for small distributed generation (SDG). You can read our full response here on our brand new TNUoS Stakeholder Advocacy Hub.

As the Transmission Owner (TO) in the North of Scotland, we welcome the opportunity to engage in this consultation process, sharing views on behalf of our business, and importantly also on behalf of our current and future connected customers.

We agree that all users contributing to the cost of the operation and investment of the transmission network should pay their way through use of system charges. However, we remain concerned that there is still a great deal of uncertainty as to how the complete package of reforms under consideration in this SCR will impact, which could result in unintended consequences for renewable energy development, and transmission network investment, particularly in Scotland.

As feedback from our customers and wider stakeholders demonstrates, continued ambiguity over future network charging arrangements creates an unhelpful environment for all – demand and generation customers, network owners and ultimately consumers – delaying our transition to a flexible energy system and ultimately putting net zero and green recovery targets at risk. We therefore disagree with the conclusions within the SCR’s accompanying impact assessments that the reform proposed would significantly reduce costs for consumers.

Over the past year, SSEN Transmission has been seeking views from our customers and those with an interest in our network to understand current barriers and concerns with the current transmission charging regime, including the Access SCR. This feedback highlights that above everything else, users of the transmission network need cost certainty and forecastable network charges to deliver vital renewable electricity projects that will enable the UK’s legally binding emissions reduction target.

We also need this certainty so that we can plan our network efficiently; connecting the critical infrastructure that will help to unlock GB’s collective decarbonisation efforts.

Through our engagement on the topic of TNUoS, over 90% of our stakeholders told us that TNUoS reform is undoubtably required and over 80% told us that TNUoS currently presents a barrier to the delivery of future projects. It’s clear that the current TNUoS methodology, which was devised over 30 years ago for a fossil fuel led energy system, is no longer fit for purpose in a net zero world, and that any reform needs to enable not stunt further renewable growth.

We note and welcome Ofgem’s recognition within the consultation of the need to undertake a wider review of TNUoS in addition to the Access SCR consultation. This is a positive step to help break down current barriers. However we remain cautious, given the history of how long SCRs can take, that further delay will not enable required investment to be delivered at scale and pace to enable 2030 renewable targets.

As we continue to deliver a network for net zero and continue to advocate on the case for TNUoS reform, we look forward to engaging further in the SCR consultation outcomes, and the proposed wider TNUoS review process. In the context of the climate emergency but also for the benefit of consumers, industry and a just and green recovery, what we urgently need now is a clear path for this review, to provide clarity on timescales and scope for change.