Planning for uncertainty: What's happening with Third Party Costs?
4th August 2020
Only 40% of your business’s electricity bill covers the cost of electricity. The remaining 60 per cent is made up of Third Party Costs (TPCs) that are designed to help ensure the whole country has a safe and secure supply of energy we can all rely on.
Download our whitepaper explaining how the pandemic could affect your Third Party Costs.
Since the beginning of the coronavirus pandemic, there's been an unprecedented fall in demand for electricity. Along with the huge amount of electricity being generated by renewable sources such as wind and solar, this has brought about equally unprecedented increases in some of these TPCs as National Grid works to keep our power supply balanced.
Experts predict that this is likely to lead to a rise in TPCs for businesses, including:
Higher Balancing Service Use of System (BSUoS) charges
Over the past two years, BSUoS charges have significantly increased in line with the decrease in the levels of stable thermal generation, which have traditionally provided essential stability and balancing requirements. This volatility has been heightened during periods of low demand and high intermittent generation, such as wind turbine output and solar generation. This scenario describes the period following lockdown almost perfectly.
Increased charges for Small Scale Feed in Tariffs (ss-FiT)
Due to the sunny few months across the second quarter of 2020, the cost of this legacy scheme for supporting small generators of low carbon and renewable power is expected to rise. This increase will be further affected by the fact that these charges are being collected from a smaller base.
Rising charges for Contracts for Difference Feed-in-Tariff (CfD FiT)
The costs for this legacy scheme to support large-scale renewable generation are expected to rise because the base from which they are collected has shrunk. Because the Department for Business, Energy and Industrial Strategy (BEIS) is looking to take a loan to cover the shortfall in payments in Q2 2020, the bulk of these increased charges will not appear in bills until Q2 2021.
To help you understand the forces that are driving these rising TPCs – and what they might mean for your business – Haven Power has produced an exclusive report on the electricity market as it stands today.
Download your copy today, and make sure you’re in the know.Download your free report now
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