Humpty Dumpty and Ofgem's Definition of Storage

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Ofgem's Consultation on Storage.

Ofgem has just published a document to “clarify” the position of storage in the regulatory framework. While the core proposal for a new category of generation licence makes sense, there is a strange twist which is redolent of Humpty Dumpty’s line that “when I use a word it means just what I choose it to mean”.

Ofgem is proposing a special clause that says the licensee shall not have self-consumption as the primary function when operating its storage facility.

The reason for that is that Ofgem is pre-occupied with customers avoiding network charges and policy costs by putting storage behind the meter. There is a valid concern there but there are also good reasons why microgrids can be a good idea (see my previous blog).

So while seeking to “clarify” the position of storage Ofgem has just introduced further uncertainty around what constitutes “primary purpose” and what storage that is used for self-consumption is if it isn’t storage?

There’s also a question as to why self-consumption for storage is a problem but is seemingly acceptable for other generation.

This smacks of a last-minute fix that hasn’t been thought through. What Ofgem needs to do is sort the definition of storage (two years after it first raised the issue), address the double charging point but take a bit of time to look at the problem of self-consumption. There must be a way of dealing with Ofgem’s valid concern about customers avoiding policy costs without creating a whole new layer of meaning to a word that we all think we know what it means.