Distributed generation — Regulating for change

Distributed Generation (DG) is continuing to expand in Great Britain (GB), primarily due to the growth of renewable generation. DG is forecast to increase by 10 GW between 2005 and 2010. It is vital that this new capacity is connected in a cost efficient way that maintains or improves the quality of supply to consumers. Ofgem (the GB energy regulator) recognises the opportunities to employ innovative solutions to achieve this goal and in particular the evolution of distribution networks from passive to active systems. This paper summarises the approaches that Ofgem is taking to help manage the challenges this growth brings to the companies it regulates. It sets out the direct actions it is implementing through price control mechanisms and the indirect actions it is supporting through industry-wide initiatives.