Following the request from National Grid Electricity System Operator (ESO), Ofgem has agreed to postpone the implementation of the reforms outlined in the Targeted System Review by a year.
This means that energy users with half-hourly meters on their sites will be able to avoid Transmission Network Use of System Charges by lowering their consumption at peak times for the next two years Winter 2020/21, and Winter 2021/22.
The new announcement comes in response to multiple concerns from suppliers and large energy users that have been raised to National Grid (ESO) since the first Ofgem’s decision in November 2019.
During the consultation process, the industry stakeholders provided sufficient evidence to suggest that the initial notice period was too short for suppliers and demand users to know what the tariffs would be in the 2021/22 charging year.
“There is an increasing view in industry that the timeline for implementing the TDR [Transmission Demand Residual] reforms contains significant risks, and there is a growing concern that accurate charges may not be delivered on time. (…) Balancing this risk against the expected benefits of the introduction of new TDR charges in 2021 compared to 2022, we now believe that a delay of one year is in the best interests of consumers.”, explained Frances Warburton, Director for Energy System Transition at Ofgem
The reform to the Triad system has been decided through the Targeted Charging Review, part of Ofgem’s ongoing work to update the way that consumers pay for their use of the electricity network infrastructure. In November 2019, Ofgem decided that it is unfair that some energy users can reduce their consumption at certain times to avoid the cost, which ultimately falls onto those unable to take actions to avoid it.
In consequence of Ofgem’s new decision on the timeline, from April 2022 the residual component of the Transmission Use of System (UoS) charge will be changed to a fixed-charge-per-day-per-site system.
Learn more about the Targeted Charging Review and what it means for Triads and your businesses from our recent blog.
During Winter 2019/20 GridBeyond’s experts correctly forecast all three Triad seasons, saving our clients thousands of pounds. Learn more in our company statement.