The underused energy management tool that can offset rising energy costs
The non-commodity element of energy costs is set to push prices up considerably over the next few years – yet research by YouGov finds awareness of this seems limited. Energy market expert Ben Spry shares the detail behind the forecasts and assesses the impact Demand Side Response can provide to help mitigate price rises.
The most expensive peak-related cost is National Grid’s Transmission Network Use of System (TNUoS) charge.
“TNUoS charges are currently levied against consumption during periods of peak national demand (Triads) in the winter season (1 November to 28 February), and can be as much as £54,906* per megawatt,” explains Fred. “Whether part of an overall DSR strategy or as a stand-alone activity, active Triad management to reduce these charges is becoming commonplace, especially with TNUoS costs remaining substantial in the short term.”
nBS already offers a highly-regarded Triad Warning Service, operated by its in-house team of expert analysts and forecasters. Now, via the Energy HQ DSR team, it can also provide an Automated Triad Service.
“Using our Smart Controller, we can automate the delivery of Triad management as well as seeking to optimise the response businesses can provide to increase Triad savings year on year,” says Dan Connor. “In addition, our customers achieve coincidental savings on Capacity Mechanism and Distribution Use of System (DUoS) charges, as a result of Triad management activity.”
It’s worth noting, however, that Triad charging methodology is currently under review by Ofgem and changes may take effect from April 2020 if Ofgem’s Targeted Charging Review is implemented. “National Grid will still be looking at ways to engage consumers to help manage periods of peak demand,” says Helen Inwood. “And as the Distribution Network Operators start to transition into the proposed Distribution System Operator roles, we anticipate a growing requirement for DSR.”
The other non-commodity charge linked to winter demand peaks is the Capacity Mechanism. One of four new charges introduced in 2015 as part of the government’s Electricity Market Reform (EMR) legislation, the Capacity Mechanism is calculated according to consumption during peak periods throughout winter – i.e. 4pm to 7pm on weekdays from 1 November to 28 February.