Mr. Gareth R. ThomasTo ask the Secretary of State for Trade and Industry if she will take steps to introduce electricity Distribution Charging Arrangements which(a) reduce the capital cost of connecting new embedded generators to the distribution network and (b) encourage lower network losses and reduced costs of network investments relating to embedded generators. [12734]
§ Mr. WilsonDistribution Charging Arrangements are a matter for Ofgem.
Ofgem's recent consultation paper "Embedded generation: price controls, incentives and connection charging—a preliminary consultation document" considers whether there might be an alternative to the payment of "deep" connection charges up-front. This paper is specifically aimed at moving without delay to a workable interim solution, under the existing pricing control and possibly from 1 April 2002. Ofgem have asked for responses to the consultation by 16 November, and I understand it is their intention to produce a summary of responses before the end of the year.
660WEmbedded generation offers the prospect of a significant reduction in network losses, but more work is needed to understand the best way to achieve this goal. The distribution price control already contains incentives for distribution network operators (DNOs) to reduce network losses, but work on embedded generation presents new opportunities for achieving significant reductions.
An Embedded Generation Coordinating Group (EGCG) is currently being established to ensure that these issues and the wider recommendations outlined in the Report of the Embedded Generation Working Group into Network Access Issues are addressed in a timely and co-ordinated manner. An announcement about the EGCG will be made shortly.