Currently, the way electricity distribution companies calculate costs brings higher charges for half-hourly (HH) consumers during late afternoon. These Distribution Use of System costs (DUoS charges) occur in the so-called ‘Red Band’. For non-half hourly (NHH) metered customers, this contributes to the higher Day rate. However, this does not provide the correct investment signals for distribution companies. Costs need to be spread more equally across the day.
This suggested change has led to modification DCP 228, which Ofgem has confirmed will go live from April 2018.
Red Band DUoS charges
For HH and P272 consumers this modification will lower Red Band and Day rate charges, while increasing the prices in the Amber, Green and Night rate bands.
An impact assessment released by Ofgem commented, “domestic and non-domestic ‘single rate’ consumers would generally face a reduction in charges”. At the same time, “two rate (Day/Night rate) consumers would face a small increase in charges” and, “the net effect is that charges for HH consumers in aggregate will rise.”
Take control of your energy costs
These changes will increase the need to understand and control when you use energy and how much. There will be a stronger need for a connected, controls-based strategy, as the costs of delivery shift. This will allow equipment to automatically shift operation according to tariff movements, rather than in a static system.
A great way to manage these costs is through Internet of Things (IoT) enabled Building Management Systems (BMS) and controls. Our solution, Intelligent Building Controls, can help you visualise and gain valuable insight into your energy consumption. Using Intelligent Building Controls you can implement, amend and manage control strategies with a touch of a button – make shifting or reducing your energy consumption during more expensive time bands easy to manage, helping you to reduce your costs.
We can help you budget for future energy costs
To further help you plan ahead and budget for future costs we can provide our Long-term Price Forecast Report. This report is a valuable tool which illustrates the annual projected increases to your energy bills and calculates your energy spend for the next 5 years. This allows you to confidently forward budget and avoid any nasty surprises.
Find out more here.