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Network Charging Reforms Factsheet: Targeted Charging Review

Andrew Enzor Andrew Enzor Senior Consultant
3rd December 2019

Ofgem recently published its decision on the Targeted Charging Review (TCR) Significant Code Review (SCR) and issued a direction to the network companies to progress code modifications to give effect to the conclusions. There are two main elements to the review:

  • Balancing Services Use of System (BSUoS) charges for embedded generation
  • ‘Residual’ Transmission Network Use of System (TNUoS) and Distribution Use of System (DUoS) charges – the parts of TNUoS and DUoS which ensure network companies recover their allowed revenues after Forward Looking Charges (which aim to send cost reflective signals to users encouraging them to use the networks in a particular way) have been levied

This factsheet summarises the key changes which will be implemented following Ofgem’s decision on the TCR, noting that Forward Looking Charges are also under review under the Network Access and Forward Looking Charges SCR.

 

Supporting notes:

Acronyms and terms

  • TCR – Targeted Charging Review
  • SCR – Significant Code Review
  • DUoS – Distribution Use of System
  • TNUoS – Transmission Network Use of System
  • BSUoS – Balancing Services Use of System
  • FLC – Forward Looking Charges which send signals to users about the effect of their behaviour, encouraging them to use the networks in a particular way
  • Residual – charges which recover the fixed costs of providing existing pylons and cables
  • TGR – Transmission Generator Residual
  • DG – Distributed Generation
  • EHV – Extra high voltage (>22kV)
  • HV – High voltage (1-22kV)
  • LV – Low voltage (<1kV)
  • DNO – Distribution Network Operator
  • Large customers – those with an agreed capacity, typically Current Transformer (CT) metered
  • Small customers – those without an agreed capacity, typically Whole Current (WC) metered

Total cost data all relates to 2018/19, and uses the following sources:

  • DUoS – DNO published Common Distribution Charging Methodology models
  • TNUoS – National Grid’s 2018/19 TNUoS charges report
  • BSUoS – Current BSUoS data published by National Grid