Charging Methodology Review

Under the current network charging methodology, storage providers are classified as generator parties. However, storage assets exhibit characteristics of both generation and demand, and they account for approximately 40% of the current transmission network connections queue. Industry stakeholders claim that the existing system does not encourage investment. The proposal to NESO is to establish a group with industry experts to determine if, and how, storage assets might be charged in a way that reflects their benefit to the network.

Benefits

This work evaluates whether current charging models effectively guide storage investment, such as siting to avoid costly reinforcements. It aims to test assumptions about storage and clarify its impact on network capacity. A key focus is whether Transmission Network Use of System (TNUoS) charges align with system planning principles or if a new approach based on short, medium, and long-term storage characteristics is needed. Better alignment could reduce unnecessary or fragmented code modifications. Insights from the subgroup will be shared with NESO and industry to improve planning understanding. Addressing knowledge gaps in forecasting and storage treatment will help resolve tensions with providers. Ultimately, this supports more informed decisions that advance net zero goals and deliver consumer benefits. 

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