The new methodology is expected to be effective from 1 April 2014.
The motive behind changing the methodology is to facilitate the timely move to a low carbon energy sector and at the same time maintaining a robust and efficient supply of electricity across UK’s high voltage network.
In addition, it will also take into consideration the type of generator and how it uses the network to transmit power to parts of the network where the demand is located.
The proposed methodology would lower the transmission charges for the Scottish Islands than may have been expected if the methodology was not changed, but still remain higher than the mainland due to the cost of building and running the sub-sea links.
The proposal is expected to narrow the difference in generation tariffs between the north and south of Britain.
According to Ofgem, tariffs in the north will decrease, while tariffs in the south will increase relative to the status quo.
Ofgem said, "Our view is supported by the modelling analysis submitted to us by industry which suggests that between 2020 and 2030 consumer bills could be up to £8.30 per annum lower than under the current methodology."
