Third-Party Charges update

Covid-19 has not only had a dramatic effect on people’s lives but also the energy market.

With industry effectively shutting down for long periods, business energy use over the year has plummeted while domestic energy use has risen, due to more people working from home following the closure of offices and other work premises.

The landscape has also changed with respect to the increased reliance on renewable energy generation as opposed to fossil fuels. Even the US, where government policy has favoured traditional sources over a more innovative approach, has broken records in this field.

Whilst low electricity demand and unusually high renewable generation is clearly a good combination in the race to a carbon-zero future, it does potentially have implications on the Third Party Charges (TPCs) customers may have to pay as the country’s power distribution system (National Grid) attempts to find some equilibrium.

As TPCs can make up to 60 per cent of your energy bill, news of any increase in this area is clearly not welcome.

TPCs include so-called green levies such as the Renewables Obligation (RO) and Contracts for Difference (CfD), which were introduced by the government to incentivise companies to be more energy efficient.

Others are designed to help support the National Grid, which is where the Balancing Services Use of System (BSUoS), Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) come into play.

If you would like to know more about TPCs and how they may affect your business over the coming years, please get in touch on 01225-867722.