Guest Blog: Christopher Trigg – Excess Capacity Charge Changes

As we approach the end of summer many of us are starting to think about our energy bills across the colder months. And its not just the inclement weather that […]

By Freddie Rand

As we approach the end of summer many of us are starting to think about our energy bills across the colder months. And its not just the inclement weather that will impact our bills.

DCP161 is a new measure introduced by Ofgem from 1st April 2018 to ensure that half-hourly (HH) supplies that exceed their agreed supply capacity (ASC) are penalised for additional capacity required.

For businesses, the Excess Capacity Charge is set to rise by an average of 90%. After a period of consultation, DNO’s have been asked to make the excess capacity charge more cost reflective. Currently the excess charge is set at the same level as the Standard Capacity Charge. But come April 2018, customers will be more heavily penalised for using over and above their agreed Maximum Import Capacity (MIC). The change in charge level will vary from region to region, but it is estimated in some areas this increase could be up to 183% above the current rate.

One way businesses can mitigate against the rise is by ensuring they review the MIC with their supplier prior to 2018, particularly if they regularly use over and above their agreed capacity limit.

However, a smarter way to protect against further legislation and price rises is to look to decrease overall reliance on grid-supplied energy.

Installing on-site renewable generation and battery storage has never been more relevant.

This increase in Excess Capacity Charges is one of a raft of legislative drivers around the corner that will continue to drive up energy bills and put further pressures on UK homes and businesses. With falling construction and installation costs, the economics of onsite generation are healthy.  Through its online commercial feasibility assessments, OnGen customers are demonstrating an average IRR on projects of 12.6%, with a payback period of just 8.7 years. The addition of battery storage to the energy mix now also means that businesses can look to onsite generation as a potential source of additional revenue, in addition to the significant energy cost savings.

Find out more at www.ongen.co.uk to see how energy users can start to make affordable, sustainable changes that will future-proof your organisation/profits.

Christopher Trigg is Director of OnGen Ltd.

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