Found 57 results
Electricity non-commodity costs, also known as Third Party Charges (or TPCs), are faced by the vast majority of end consumers that use electricity. They represent a significant proportion of the energy bill for domestic, SME and large industrial user types; however, their applicability and scale can vary depending on the...
"While it is true that no single solution can comprehensively tackle the challenges facing the decarbonisation of the electricity system, a combination of incremental changes to areas such as network charging can provide us with the means to make substantial improvements without the need for a protracted and costly overhaul...
Last year, we partnered together with Wind Energy Ireland (WEI) to produce a report titled “Improving Revenue Certainty and Risk Allocation for New Renewable Generators”, which explored potential auction policy changes for the RESS auction that would help de-risk renewable investment for developers and generators. At the heart of this...
Some of our team have looked back throughout 2022 and picked their most exciting ‘Chart of the Week’. Their choices include exploring green tariffs, wholesale gas prices, CfD allocation round 4 and the MHHS Implementation Levy. It’s My Birthday – Two years of Dynamic Containment Picked by Tom Faulkner, Head...
Concerns that the strike prices in the upcoming CFD auction round could be too low to be deliverable have been raised as more details of the scheme have emerged. Back in May 2022, our chief executive Gareth Miller discussed why such fears may have some grounding. Last week I was...
On 21 September, the Final Modification Report for CMP395 was published by National Grid ESO (NG ESO). CMP395 seeks to cap the half-hourly Balancing Services Use of System charge (BSUoS) at £15/MWh over the winter period (1 October 2022 – 31 March 2023), with the deferred costs recouped in the...
Against the backdrop of record high and volatile energy prices, Ofgem set out on 8 July its view on key aspects of the GB energy system where it considers significant reform is required to deliver a resilient, low cost, low carbon energy sector. Recent developments in the energy market, such...
Energy storage and flexibility
In a world of open governance code modifications, change is a constant. You only have to look at the number of code modifications ongoing at any one time – National Grid lists 36 modifications in development relating to transmission network charging alone – for evidence of that. But in recent...
Balancing Service Use of System (BSUoS) charges have continued to be the dominant driver of Third-Party Charge increases in recent months, with costs remaining elevated since last autumn. In this ‘Chart of the week’, we present a view of past monthly BSUoS charges and expectations for future costs on a...
Energy storage and flexibility
The electricity network charging landscape is complex and ever-changing. We discuss recent implemented reforms and changes we expect to see.
CMP308 will be implemented on 1 April 2023 and, while an Ofgem decision is still awaited on the proposal to make BSUoS a fixed volumetric charge, transmission-connected generators now have clarity that they will no longer be liable for BSUoS costs from this date.
Over the last few years Balancing Services Use of System (BSUoS) charges have experienced significant volatility, with costs reaching record high levels which have added to the rise in consumer electricity bills and ultimately resulted in intervention in order to cap BSUoS rates. In this Chart of the week’, we...
In recent months, the GB energy market has been exposed to extreme volatility as wholesale prices have grown rapidly, leading to a significant number of supplier exits and questions over consumer affordability of energy bills. This has resulted in notable movement across a number of non-commodity costs (also known as...
The extraordinary developments that have occurred in the energy sector in recent months have led to a tumultuous time for all participants. We have taken a look back through our archives to where we highlighted our concerns a number of years ago that this outcome was, unfortunately, a real possibility. This...
Energy storage and flexibility
This weeks Chart of the Week takes a look at the costs incurred from balancing the electricity system over the last 12 months
Following the end of the transition period on 31 December 2020 and the signing of the Trade and Cooperation Agreement, aspects of the relationship between UK and the EU in respect of the arrangements for energy trading and cooperation have changed. We set out answers to some Frequently Asked Questions...
The COVID-19 crisis forced many bodies and companies to change their priorities and caused major wholesale price changes. With another national lockdown announced this week, the pandemic is certain to remain a significant factor this year.
The lower demand and action to curtail high renewables output, with solar and wind hitting record levels, led to a sharp rise in Balancing Services Use of System (BSUoS) costs
"While a growing proportion of wind technologies in the generation mix is necessary for reaching net zero, it is not without its challenges."
Whilst this is an extreme example of the impacts of weather correlated pricing events, it does highlight how wider factors in Europe can have a material impact on GB wholesale price formation.
Lee Drummee Analyst at Cornwall Insight featured on Power Technology discussing the effects of fall in energy demand, caused by the UK Covid-19 lockdown on the Balancing Mechanism. He explained that the fall in energy demand because of the Covid-19 lockdown was always expected to increase the £/MWh rate of...
“With increased BSUoS costs coming at a time of difficulty in the market, the deferment of additional BSUoS costs would be a welcome relief to suppliers and transmission connected generators alike.”
However, due to the scale and length of the impacts resulting from the COVID-19 outbreak, and the industry’s various methods of cost recovery, the effects on TPCs are likely to be felt for many years to come.
Energy storage and flexibility
Suppliers have many balls to juggle, but the regulator is cementing its position that it cares most about how customers are treated.
With increased BSUoS costs coming at a time of difficulty for the market, the deferment of additional BSUoS costs would be a welcome relief to suppliers and transmission connected generators alike.
"The Bank Holiday weekend also saw embedded wind generation peak at 3.7GW and solar output peak at 8.7GW, reducing demand on the transmission system.
Ofgem is still considering UNC721 and UNC725, that would enable shippers to update closed sites’ consumption volumes (Annual Quantity and Supply Offtake Quantity) more frequently, and which would see reductions in energy allocation and transportation charges where the customers have reduced or discontinued activities.
Energy storage and flexibility
This week National Grid Electricity System Operator (“the ESO”) released its latest forecast of Balancing Services Use of System (BSUoS) charges – levied on suppliers and large generators to recover costs incurred by the ESO in managing the system on a second by second basis. In this blog we look...
Ofgem’s Targeted Charging Review (TCR) has been a major workstream in the electricity industry since it was kicked off in March 2017. Looking at several elements of the network charging regime that were deemed no longer fit for purpose in the changing energy system, it has wound its way towards...
This article was originally published on 6 April 2020 in Energy Spectrum Issue 709.
