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United Kingdom

United Kingdom

Full value of wind to be recognised in payments

The "embedded" value of wind energy in the electricity system is to be financially recognised in Britain. NFFO contracted renewable energy generators will be able to trade "triad benefits" with any electricity supplier, says a ruling by the UK electricity regulator. The benefits relate to charges on local distribution networks for use of the National Grid system; they are calculated by averaging demand at the grid supply point over three winter peak half hours. Any generation "embedded" in local networks that is producing electricity during the three peaks reduces imports of power from the National Grid and saves on the amount charged by the National Grid Company. This saving is known as the "triad benefit." Most embedded generators are able to trade triad benefits with electricity suppliers -- other than the local regional electricity company (REC) which would by default be credited with the saving. But some renewable generators with Non Fossil Fuel Obligation contracts have been barred from trading the benefits. Their host RECs have argued that a clause in their NFFO contract dictates that only the REC can reap the saving. But Regulator Stephen Littlechild has clarified the position on NFFO contracted generation after National Power brought a case before him for determination. He ruled that National Power's supply business should have been credited with triad benefits it had contracted for with three wind farms. Littlechild added that in future, NFFO contracts should spell out the generator's ability to trade triad benefits.

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