Energy & Power, Heating, Cooling & Drying

Online Tool Calculates Potential Impact Of Electricity Charging Shake-up For Manufacturers

Phil Black - PII Editor 06/11/2017

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Energy has launched a free online tool to help UK manufacturers evaluate how major changes to electricity distribution charging may impact their bills.

On 1 April 2018 energy regulator Ofgem is introducing DCP228, which will shake-up the way Distribution Use of System (DUoS) charges are calculated.

DUoS charges are made by the regional Distribution Network Operators (DNOs) for the transportation of electricity from the National Grid to customer meters and account for around 10% of an average electricity bill.

DCP228 will change the current triple-tiered (red, amber and green) banding used to calculate DUoS charges. Currently, electricity consumed in the red tier peak-time period can cost up to 20 times more than units used in the amber and green tiers. DCP228 will balance the charges more evenly across the three tiers to better reflect average national demand and remove the large price differentials.

DCP228 will apply to every UK business, except the largest electricity connections using extra high voltage distribution. Its impact will, however, vary from customer-to-customer, depending on factors such as consumption profile, voltage level and region.

Richard Smith, Director of Strategy for Energy, explained: “For many DCP228 will mean a rise in energy costs, but for those who consume a lot of power in the red period of the day, distribution costs may be lower.

It’s important to understand how the changes may affect bills, which is why we have launched our free estimation tool to give companies some indication of the cost impact and help them prepare.”

“Those businesses that have invested in demand management measures, or made operational changes, to shift load away from red periods will see reduced benefits from peak-time avoidance. Going forward, energy efficiency measures, informed by accurate consumption monitoring, are likely to have more impact on costs than load management, so energy saving strategies must move to the top of the business agenda.”

The free online tool is available at www.inprovaenergy.com/dcp228