Understanding the UK Energy Market
Helping a Chiropractor with their Energy Costs

As you may be aware, a number of Third Party Electricity Costs (TPCs) are set to increase from 1st April 2018.

Here’s a round-up of each charge and how it may affect you: I may get slightly technical but bear with me, Third Party Electricity Costs aren’t the most simple of things to explain!

Excess Capacity Charge – DUoS
This charge affects all customers’ with a Half Hourly Electricity Supply. If you’re unsure if you have this type of supply, read our article on Half-Hourly Meters.
The capacity charge element of the Distribution Use of System (DUoS) charges relates to the contracted power capacity level and to any electricity used above that level: the excess capacity. It’s this excess capacity charge that will be at a higher rate than the capacity charge from April 2018.

Your Distribution Network Operator (DNO) is responsible for levying these charges, with the rate varying from one region to the next. The table overleaf shows how much each of the DNOs
will be charging. It may also be a good idea to get your capacity data from your DNO, and look for opportunities to reduce or avoid the excess charge, or ask the DNO to change your capacity. level. If you would like us to find out more about your current capacity charge and rate, contact our friendly team today.

Renewable Obligation Element
This charge affects everyone with a commercial type of meter. The charge relates to the UK Government’s encouragement of renewable power generation and usage. If you are in an Energy Intensive Industry (EII) this charge will not affect you, as you are exempt.

From 1st April 2018 the EII Exemption charge will increase by £/MWh. If you’d like to know how much this will cost you, call our team today.

Transmission Losses
This charge only affects the larger consumers of Electricity, with Flexible Contract Arrangements.

One of the charges you pay relates to the electricity that’s lost between the generator and the distribution system – known as the transmission loss. The Competition and Markets Authority has ruled that the existing calculation – using the same rate across the country – has an adverse effect on competition. National Grid’s response is a modification (known as P350) to calculate the losses.

The new calculation applies the principle that the further electricity travels, the higher the transmission losses will be – meaning that the cost will vary by location. While this means we can’t specify how much each individual business will pay, we predict that customers with Flex contracts will see only a negligible change in their costs. To find out more, visit the Elexon Website.

Customers with Fixed contracts will see no change to their costs during the length of their existing contract.

If you’re unsure about any of the above Third Party Electricity Costs and how/if they will affect you in the coming months, give our team a call to talk you through it all.

Rhys Boven
Rhys Boven
Rhys Boven is the Managing Director at leading energy brokers Switched On Energy. Most people have no idea if they are paying the correct amount or are on competitive terms, Rhys uses his expertise in the industry to help his customers make more money, save time, have less stress and peace of mind. Connect with Rhys Boven on LinkedIn >>

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