CAPTURING VALUE FROM TRIAD AVOIDANCE
23 Apr 2019

For half-hourly electricity meters, transmission (TNUoS) costs are paid to National Grid via a mechanism known as the Triads. The Triads are the three half-hour settlement periods of the highest demand from the start of November through to the end of February that are separated by 10 clear days. The average consumption of each half-hourly meter during the triad is then multiplied by a rate set at a GSP group level to produce a transmission cost. TRIADs present an opportunity for customers to monetise flexibility by combination of reducing demand and/or utilising behind the meter generation or storage solutions. The trade-off customers face is the potential saving from TRIAD avoidance versus operational and process issues stemming from shutdowns.

Across our half-hourly electricity portfolio, TNUOS (TRIAD) costs average around £8.00 / MWh when smeared across an annual contract, representing approximately 7% of the overall bill. Given this relatively large overall bill exposure, TRIAD avoidance continues to be regarded as ‘low hanging fruit’ in terms of demand side response opportunities. Given they are peak demand events, typically TRIADs occur during cold periods with high heating demand.

National Grid produce a variety of forecasts and data than can assist in forecasting and analysing TRIAD costs. Based on the latest 5-year forecast running from Winter 20/21 to Winter 24/25 we can see that Grid expect Triads costs to increase from £51.11/KW to £61.71/KW when averaged across all GSPs. Based on this alone, it would suggest that TRIAD avoidance is an increasingly attractive demand side management instrument for consumers to be engaging in.

However, whilst the rewards for demand reductions over the TRIAD are set to increase there are several issues that are well highlighted by the last 2 winters. The previous two winters in the UK have raised some very different challenges for demand forecasters, meaning that suppliers and consultants are typically issuing more TRIAD alerts in order to make sure that none of the TRIADs pass without alerts being issued. The Beast from the East meant that Winter 17/18 was the first TRIAD season since the scheme began in 1990 not to see any TRIAD event in January and for winter peak demand to fall outside of the TRIAD window. The TRIADs are also getting later in the day. In addition to these difficulties around forecasting TRIADs, the Targeted Charging Review is likely to change the rulebook with regards to TNUoS charging.

A TNUoS (TRIAD) pass-through contract is a great way for some customers to monetise demand flexibility. The pay outs can be meaningful and unlike other DSR solutions there is no liability for not exercising DSR during the event. Asides from pass-through products, every time we price a fixed price contract, we are making a number of assumptions about what a meter’s consumption will do during the TRIADs. Different meters respond to the TRIADs in different ways, some peaking (eg. a hotel with a large amount of electric heating) and some even decreasing (eg. an indoor ski center).

To the extent that you have any questions on the TRIADs, or would like to understand more about how you’re impacted by TNUoS costs please contact our Solutions Team.

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