Energy prices & policy

Non-commodity charges make up a large share of the overall cost of power – as much as 60% for some large consumers.

But if proposed changes to the way in which key distribution and transmission charges are calculated go ahead, many businesses could see this share increase.

Earlier this month, Ofgem published a consultation setting out its latest plans for the way the residual element of Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges are recovered.

Non-commodity elements of energy costs that are currently causing consternation for many large consumers.

So it’s been good to hear that Ofgem – which is planning major changes to the way distribution and transmission charges are calculated, as well as embedded benefits –is allowing extra time before these changes take effect

non-commodity elements of energy costs that are currently causing consternation for many large consumers.

So it’s been good to hear that Ofgem – which is planning major changes to the way distribution and transmission charges are calculated, as well as embedded benefits –is allowing extra time before these changes take effect.

The Renewables Obligation (RO) charge seeks to cover the cost of  supplier obligation to source a certain proportion of supplied power from accredited renewable generators.

Energy invoices are made up of a combination of the commodity cost (the energy you consume) and non-commodity costs.

The energy system is going through a radical transformation – we are generating and using electricity in different ways, in different locations and at different times.

Non-commodity charges make up the lion’s share of overall energy costs and are set to increase significantly over the next decade. As a result, understanding and, where possible, minimising these costs is vital for everyone responsible for managing energy.

Today, Ofgem have announced delays to implementation to its Future Charging and Access reforms, which includes Ofgem’s proposed Targeted Charging Review (TCR). They’ve announced the following delays

BSUoS costs recover the cost of day-to-day operation of the transmission system. Generators, suppliers and end users are liable for these costs, which are calculated on a half hourly basis.