Targeted charging reviews and what are the impacts for your business
Targeted Charging Review reforms will begin to come into effect from 1st April 2022. This will have substantial implications for most non-domestic energy users so our handy guide takes you through how it could affect your business.
What is the targeted charging review?
The review was designed to address the potential inefficient use of networks and sees a move from a time-based use of system model to an overall use of system model in order to share charges more fairly between end users. The first tranche of changes resulting from the Ofgem-led Targeted Charging Review (TCR) is set to take effect from 1st April 2022.
What will change?
The Distribution Use of Systems (DUoS) charging structure will be the first to change with effect from 1st April 2022. The Transmission Use of Systems (TNUoS) charging structure changes have been delayed until April 2023.
What are the changes to DUoS charges?
DUoS is a charge for receiving electricity from your local network to your business. Currently, some businesses are able to avoid DUoS costs by managing when they use their electricity. However, the new TCR charging structure will introduce fixed charging for all users, meaning that businesses will no longer be able to benefit from flexibility on when they use their electricity.
Electricity supplies will be affected from 1st April 2022. The likely impact will be that smaller, half-hourly metered premises that are currently unable to take part in demand management may benefit from the changes. However, we anticipate that larger consumers who currently do manage their consumption and therefore avoid DUoS charges are likely to be subject to increased costs. The full extent of the impact is not yet clear, however we are working with our supplier to ensure that our Members understand and prepare for these changes. We will continue to update you with further details of this industry-wide change.