Policy Impacts

Triad update: business consumers given extra year to save £££££s

Posted on 01 April 2020
By Dan Jerwood
Dan Jerwood
DSR Development and Delivery Manager

Dan has worked in the energy industry since 1998 and, since joining npower Business Solutions (nBS) in 2014, he has worked exclusively on building the company’s internal Demand Side Response (DSR) capability, with key involvement in commercial, software and hardware development. In his current role, Dan now manages nBS’ end-to-end commercial, technical and delivery of DSR which forms a key part of the business’ Flexibility Services. Previous to this, Dan held roles in Yorkshire Electricity and GDF SUEZ (now Engie), covering business analysis, DSR site works planning and coordination, commercial modelling, account management, sales management and service development.

I appreciate in the current climate, this headline may sound like an April fool. But I can assure you it’s genuine good news.

Thanks to a ruling yesterday by Ofgem, large energy consumers will have another year to potentially save thousands on transmission costs via Triad management.

This is because Ofgem has agreed to National Grid’s request to delay the proposed changes being introduced as part of Ofgem’s Targeted Charging Review (TCR) to Transmission Network Use of System (TNUoS) charges.

These changes were due to be implemented in April 2021. However, after National Grid wrote to Ofgem to say “significant issues have been raised that question the value and impacts to consumers,” Ofgem has agreed to delay the changes to April 2022 (see our blog for more).

Two more winters to save £50k+ per MW

As a result, consumers who’ve already invested in on-site generation and/or strategies to manage energy more flexibly, will now benefit from an extra year of Triad savings (winter 2020/21 and winter 2021/22).

And for those who might have been considering it prior to Ofgem’s TCR, the news that we now have a further year of Triads may make investment cases or the introduction of flexible consumption more appealing.

Triad management is also an ideal introduction to the wide range of benefits that Demand Side Response (DSR) can deliver (more on this below).

With National Grid’s TNUoS charges as much as £59,267* for every megawatt (MW) of grid demand during the 2020/21 winter Triad periods**, these savings are certainly worth having.

Hitting all three 19/20 Triads

Our existing DSR customers – and those that subscribe to our Triad Warning Service – should have saved on all three Triad periods over the 2019/20 winter season if they acted on our advice.   

As reported in our recent news story, our Triad Forecasting experts successfully called all three peaks, out of total of 18 warnings.

Those customers subscribing to our Auto Triad service will have had their response enacted remotely through our in-house aggregation platform, operated by our award-winning Optimisation Desk in Swindon. This platform can be integrated with existing generation to automate Triad responses and realise the greatest cost saving.

Buying more time to build investment case

But even without the Triad system, the case for participating in DSR is still strong.

With energy costs only set to increase, thanks to the ever-growing array of non-commodity charges that ramp up invoices, finding ways to offset the impact is key. This is going to become even more pressing now such financial uncertainty lies ahead for so many businesses. 

And as the UK transitions to more diverse, decentralised and low-carbon (hence potentially more intermittent) generation, rewards will grow for consumers who can be more flexible with their consumption.

Taking a more flexible approach will also allow consumers to ‘future proof’ their sites and budgets against the loss of Triad avoidance benefit in 2022. And by establishing a more sophisticated strategy for using existing flexibility, you can then access more revenue streams.

A growing range of benefits

Participating in DSR opens up the potential to earn revenue from:

  • National Grid’s balancing and reserve services, e.g. Short-term Operating Reserve (STOR) or Firm Frequency Response (FFR)

  • Capacity Market (CM) auctions, especially since the last auction delivered a higher out-turn of £15.97/kW (we can manage DSR volume on your behalf and have already prequalified for several forthcoming periods)

  • Selling demand back at peak times or periods of market volatility via our Market Access Service

  • Local balancing schemes offered by Distribution Network Operators (DNOs)

  • Additional reserve and balancing services currently being scoped by National Grid, as well as opportunities to participate in the pan-European market through projects TERRE and MARI

Funding site resilience

If increasing your site resilience is also a priority, then the extra year of Triad income could fund the upgrade of existing on-site back-up generation.

There are so many ways to benefit from DSR. But there is certainly no ‘one size fits all’ approach. As you are no doubt aware, the regulatory and policy landscape is also complex – and ever-changing.

That’s why we never seek to ‘sell’ DSR for its own sake – but instead work as your partner to identify the best way to reduce your energy costs, harness opportunities for revenue and support a more resilient and robust route to energy security.

Please do get in touch if you’d like to find out more.

You can contact us via your Client Lead (for existing customers). Alternatively, you can contact the team direct at nBS@npower.com or by calling 0800 994 9382

* London region, National Grid’s final TNUoS Tariffs for 2020/21.

** Triads are the three half hours of peak demand between 1 November and the end of February, separated by at least ten days, as calculated by National Grid.

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