Triad Charge replaced by Targeted Charging Review
28th February 2023 marked the final day of Triad charges as we know them. Business energy users can no longer take action during peak times to significantly reduce their energy costs.
Historically, National Grid would publish their Transmission Network Use of System (TNUoS) charges annually and suppliers would be tasked with applying these charges to business electricity quotations. Suppliers would typically overlay a business’s electricity usage with the winter peak period, (November to February, weekdays between 4-7pm), which would identify how much they consume during this peak period. This methodology would calculate a rate that was specific to each customer – those consuming more electricity during the peak period would pay more and those using less would pay less.
This created a financial incentive for businesses to periodically turn down their production at certain points during the winter, usually coinciding with periods of high demand on the national grid. If they managed to reduce their consumption during the x3 highest periods of national demand the financial reward could be significant. This was also good for the grid as it meant less expensive & carbon-intensive power generation was required to meet peak demand. This activity was known as ‘Triad’ avoidance.
Source- National Grid. This chart shows the highest demand periods across Winter 2021/22 – the x3 highest periods are highlighted in red – these are the Triad periods.
Triad avoidance is now a thing of the past
28th February 2023 saw Triads come to an end and from 1st April a new legislation comes into place – Targeted Charging Review (TCR). TCR enables the vast majority of transmission charges to be levied as a fixed charge in customer bills (i.e. standing charge). Charges still vary for each customer, but they are no-longer based on consumption during the winter peak period. Instead, charges will be determined by metering type and site capacity. This new methodology will create common groupings that will ‘level the playing field’ in terms of the amount paid by individual businesses and prevent avoidance of this cost.
How will this affect your energy costs?
If you are ensure how these changes could affect your business, or you would like more details on the new Targeted Charging Review, you can get in touch with Envantage here. You can also call 0161 448 7722, or email [email protected] to speak with one of our energy experts.