5 September, 2017
OFGEM has recently announced that they will be introducing a new measure on 1st April 2018. The new tariff will be known as DCP161 and could result in your business being financially penalised if you do not take action.
The new DCP161 tariff is being introduced to recover additional costs that DNOs (Distribution Network Operators) incur when capacity levels are exceeds by customers.
At the moment there is no real incentive for you to actively manage your available site capacity and Peak Demand because you are charged at the same rate as your allocated capacity. From April 1st though you would be financially penalised for doing this.
The rate at which you would be charged an excess penalty rate which could be over three times higher than the existing standard rate. This could result in a significant increase in the overall electricity charges if your site was regularly exceeding its assigned availability capacity.
To mitigate these price rises you can look to increase your site capacity levels, or start actively managing peak demand, or a mixture of both.
Utility Alliance can help you manage your capacity chargers by optimizing your available capacity. They can also look at ways to reduce your peak energy demand to avoid excess charges.
Bob Moore, Managing Director of Utility Alliance has this advice for any business wanting to avoid additional charges.
“There are two easy management tasks site operators can undertake to make sure capacity tariff charges and associated excess charges are kept in check.
Making sure your contracted capacity level reflects the capacity your site needs, or is planned to need is key. If the site starts to be penalised for excess capacity breaches, you need to be alerted in some way so you can start to plan to shift/shed demand to bring demand and excess charges back under control”.
A successful application for additional capacity can be a slow process. In some cases in areas where supply is limited it can take months to complete. To avoid being at-risk of being financially penalised action is needed now.
Utility Alliance Energy Services team can assist you and your business with any issues regarding the new DCP161 tariff. Please 01429 727100 for more information.