P272 comes into force in under six months, but many of the 160,000 affected businesses are yet to be transferred across to mandatory half hourly billing and settlement. Many suppliers have taken the decision to wait until the April 2017 deadline to switch across all affected customers; other organisations have not yet had to renew their contract since the regulation was introduced to automatically kick off the P272 process.
If your organisation is amongst these, the good news is that there’s still time to take action to mitigate the additional costs that P272 will bring for many organisations – but acting now is crucial.
Three ways to mitigate the cost of P272
The term P272 might have been bandied about the industry for some time now, but as a quick refresh: suppliers must have installed automated businesses with sites in profile classes 05-08 by April 2017 in order to be transferred across to half hourly billing and settlement.
Whilst AMRs will give the level of energy data needed to really understand consumption across a business’ portfolio and spot opportunities for energy efficiency, P272 does also mean extra tariff and maintenance charges.
For the first time, those sites will be hit by extra charges for meter operators, data collectors and data aggregators (MOP, DC and DA respectively). When energy is consumed will also matter: half hourly settlement means exposure to higher distribution and transmission network charges during peak demand periods.
There are three ways to mitigate these costs:
Businesses will automatically be placed into a default contract with their supplier’s preferred providers. However, these contracts could be up to £800 higher per meter per year, which can soon add up into thousands of pounds of unnecessary cost, particularly for multi-site portfolios. Inenco has pre-negotiated rates that can save up to 50% on these contracts – an example of how it pays to shop around.
Businesses should also make sure that new DUoS tariff and capacity charges are set correctly to avoid paying over the odds. Inenco can help to check these to make sure you pay the correct rates from day one.
The third way is to look at ways to reduce consumption during the more expensive periods to avoid DUoS red bands and Triads. Through half-hourly data, it’s possible to identify areas or times where consumption is higher than necessary, particularly if it is outside of core business hours. Intelligent demand management (for example shifting load, adjusting HVAC programmes or changing production schedule) can all make a big difference to the bottom line when time of use is in the spotlight.
Turning P272 into an opportunity
One of the other benefits of shopping around for DC/DA providers is making sure the contracts are providing you with all the right elements to support your organisation with energy management.
Half hourly data offers a big opportunity to take control of energy and reduce costs by spotting ways to reduce consumption. The key is to make sure that DC contracts provide you with the right output to meet your needs; for example, some providers may give you a monthly CSV file, others will supply you with daily data to feed directly into your reporting software to make it easier to analyse and interpret. If your business is paying for data aggregation, it is worth making sure you get maximum value from this.
P272 isn’t all bad news. Access to better data means more chances to reduce costs and half hourly settlement will ensure accurate billing and better budget certainty. Half hourly meters also enable access to demand response schemes, unlocking new revenue streams by helping to keep the grid balanced.
Taking action now to secure competitive contracts, address budgets and make plans to mitigate extra charges will reap rewards over the coming years. There is help available to support you with every element of P272 and turn it into an opportunity – don’t wait until April 2017 to act.
Inenco has created a helpful online hub dedicated to P272 with news, resources and forums to put questions to our P272 experts at www.p272.co.uk.
Dave Cockshott is Chief commercial officer at Inenco.
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