Ofgem confirmed on 15 June that triad payments for embedded
generation customers would reduce from £47/kW to
£3-7/kW. The reduction will not be immediate, and will
instead be phased from April 2018 to 2021.
Customers connected to the distribution system can gain a range
of embedded benefits under the current system. These benefits are
paid to the customers because those customers help the distribution
network owners avoid transmission network costs. One of these is
the triad avoidance payment, paid to embedded generators who
dispatch at times of highest demand. However, last year Ofgem
became concerned that embedded benefits in general and triads in
particular were increasing above the level of the avoided costs,
and not only were becoming uneconomic but were giving the wrong
market signals and so resulting in network distortions as more and
more customers sought to gain income from triad payments.
