Hydrogen
The question
To ask the Secretary of State for Energy Security and Net Zero, whether he has had discussions with Ofgem on how its cost-benefit methodology accounts for regions with lower population density such as Wales.
Answered by Martin McCluskey
Distribution charges - which in part make up the standing charge paid for by all consumers - are designed to be cost reflective and vary by region to reflect local factors in that area, such as geography, network topology and weather conditions.
The principle of cost reflectivity is an important means by which to drive down overall system costs as it helps to guide efficient investment decisions.
Government is working with Ofgem on examining how the costs of building and running the energy system are shared across consumers, aiming to find fairer, more efficient ways of charging, while supporting clean home-grown power and economic growth.
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