We are pleased to share our Article on the OFGEM Electricity Charges. As always, if you would like to understand how these changes will affect your development, then please contact us and we will be happy to assist
Following the OFGEM published Access and Forward-Looking Charges Significant Code Review: Final Decision document in May 2022 regarding significant changes to the electricity charging arrangements, Brookbanks are delighted to hear that these are planned to go ahead in April 2023.
Currently, developers will be required to pay proportions of the required upgrade works when the local network is at/close to capacity. Adding significant offsite routing costs can result in substantial costs to developers. However, at long last, this matter is looking like it is finally coming under at least some semblance of control.
The changes are likely to lessen financial issues to developers when significant reinforcements and developers will no longer be required to fund straightforward reinforcement works, depending on the threshold, for the majority of Sites. This will mean that a substantial element of large costs currently being seen on quotations could be eliminated.
There are still some limitations, including:
- Connections requiring upgrades to the transmission network are excluded.
- “High-Cost Cap” is being introduced of £1,720/kVA for demand or £200/kw for generation. Therefore, if the cost of reinforcement works for a demand is below £1,720/kVA, then these reinforcement works will be funded by the electricity company, in full. If the costs are above this, then the developer will still be required to fund these works making up the difference.
- “Speculative Sites” will be excluded. Therefore to secure more cost effective prices will place a burden on applicants/developers to provide comprehensive data on the project and phasing details.
Brookbanks are currently working with and liaising with DNO’s across the country to understand further implications of these changes, to ensure our clients receive the best value outcome for their Site.
If you would like to understand how these changes will affect your development, please contact us and we will be happy to assist.