We used to say that about only 50% of your electricity bill was paying for the electricity itself. The rest covered the cost of moving the electricity around, paying for the management of the grid and green taxes. High prices for the commodity have changed and with it, the balance. Over the last year it has become more like 70-to-commodity:30-to-grid.

Some of the grid-related costs, Distribution Use of System (DUoS) charges and Transmission Network Use of System (TNUoS) charges, have been heavily weighted depending on your consumption at times of day for DUoS and during the Triads (the three periods of highest consumption across the whole network – in the case of TNUoS). As a result, if you’re able to control your consumption to avoid those times, you could pay disproportionately little relative to someone else who doesn’t have that flexibility. Ofgem’s Targeted Charging Review (TCR) sought to address this.

What’s happening?

Both DUoS and TNUoS are changing from consumption-based charges more towards fixed charges, applied in bands based on your consumption for smaller supplies or grid connection capacity for half-hourly-metered supplies. The change to DUoS charging comes in April this year, with the change to TNUoS from April 2023.

Is it good news?

If you’ve been using lots of electricity during late-afternoon and early evening, you might see your costs fall.

If you have been studiously avoiding expensive times of day or if you have a grid connection of greater capacity than you need most of the time – e.g. for grain drying – it’s more likely that your costs will increase.

How does it work?

The new charges are levied in 4 bands for each connection type (non-half-hourly, low voltage, high voltage, etc.). Your band has already been set and will remain until 2026 unless consumptions or capacities change by more than 50%, in which case it might be possible to arrange a review.

Annual costs (paid across 12 months) vary across the country and change dramatically from one band to the next, for instance from £3,000 per year for a 200 kVA supply to £4,600 for 250 kVA, or £17,000 for 900 kVA to £38,000 for a 1100 kVA supply.

When will I see the change?

If you’re on a fixed-price electricity contract, the changes have probably already been priced in, so you might not notice.

If your electricity contract passes through non-commodity costs – common with flexible contracts – you’ll notice the change on your April bill.

What can I do about it?

If you’re negatively impacted by the change, the first thing to do is to make sure that your grid connection capacity is correct. Sometimes we see sites using a fraction of their available capacity, and in that case, it might be possible to apply for a reduction and save thousands of pounds per year. It’s quite simple for an energy consultant to check your situation and recommend the best way forward.

If you have a big grid connection that you don’t fully use very often, is there anything else you could do to meet the occasional demand? There might be more options than you’d think and it’s just the sort of question NFU Energy’s technical team can help with.