HOW CHARGING REVIEWS MAY CHANGE THE STATUS-QUO
15 May 2019
Following our insight piece on Triads, we thought it would be a good idea to shed some light on the potential future of use of system charges (TNUoS, DUoS and BSUoS). Ofgem is consulting on changing the way these charges are recovered to make it fairer, reduce price distortions and prepare for the future energy system via the Targeted Charging Review (TCR) Significant Code Review (SCR) and the Forward-Looking Charges and Network Access SCR.
Ofgem state that consumers are currently reacting to residual charges rather than forward-looking charges, which is reducing how efficiently the grid is being used. They also argue that load shifting is increasing the residual charges for those who cannot afford to invest in peak load avoidance and that this is unfair as all users should contribute proportionately to the ongoing costs of maintaining the grid.
To examine this, the initial review aimed to consult industry on reducing embedded benefits and options to re design residual and forward looking charges. ‘Embedded benefits’ describes how sub 100 MW generators connected to the distribution network are charged differently, and favourably, compared to consumers and larger generators.
Firstly, while we are discussing some potential large changes to use of system charges – it is important to note that presently all the above is still at consultation stage, nothing has been confirmed. That being said, the potential impacts to customers are as follows:
It is also worth noting that there are other code modifications that could also change the way these charges are recovered e.g. DCP268 which looks to get all consumers to settle DUoS half-hourly with red, amber and green charging even if they are NHH meters.
For any further information or comments on this piece, please contact Sam from our Solutions Team on 02078704959 or at email@example.com