Falling temperatures and reducing daylight hours means that winter is approaching and with it the return of the Triad season. Triads are the three half-hour periods with the highest electricity demand between the start of November and the end of February. Each Triad must be separated by at least 10 clear days, which means consecutive days of high demand won’t result in multiple Triads.
Previously consumers were able to significantly lower their final transmission (TNUoS) costs by responding to Triad alerts and reducing demand. However, last winter was the final one to benefit fully from Triad avoidance as, from April 2023, transmission charges are mainly determined by a series of fixed charging bands.
This is a result of Ofgem’s Targeted Charging Review (TCR) which will allow for customers to be charged more accurately for their impact on the electricity network, provided that their capacity is set at an appropriate level. The TCR changes saw the residual element of TNUoS costs moved to a fixed charge.
There will be a small locational element (Triad) remaining but this only applies to around half of the DNO areas, located predominantly in the south. The graph below shows how Triad rates have changed since the implementation of Ofgem’s TCR changes. Where Triad rates are still applicable their value has fallen to less than 20% of pre-TCR rates.
For the majority of consumers the TCR changes will have led to a reduction in transmission costs. However, sites that have previously responded to Triad alerts are likely to have seen an increase in TNUoS costs from April 2023 as the effect of Triad avoidance is greatly reduced. Likewise, sites that have a capacity level set too high are also susceptible to DUoS and TNUoS cost increases as they are potentially placed in a higher charging band.
The charging band boundaries in the table below apply to both DUoS and TNUoS tariffs and have been fixed until the end of March 2026 when the next electricity price controls begin (RIIO-3). However, the charging band a site is placed in from April 2026 will be decided by their average consumption/capacity over a two year period prior to this. It is therefore important to ensure that all of your HH sites have the correct capacity level before this assessment period starts.
* All boundaries are inclusive of the upper threshold and exclusive of the lower threshold i.e. Lower < x ≤ Upper.
EIC Track Record of Success
EIC has an in-house model which has successfully forecast every triad period for ten of the last eleven years. We issue clients with comprehensive alerts advising them when a Triad is forecast, so they can reduce consumption accordingly.
Our Triad Alert Service forecasts the likelihood of any particular day being a Triad and sends alerts before 10am. This gives businesses time to take informed action to avoid high usage during these half-hour periods, while minimising disruption to their everyday activity. In addition, we monitor the market throughout the day and in the event of significant change we will send out another alert in the afternoon. The daily report can also help you plan ahead with an overview of the next 14 days alongside a long-term winter outlook.
Calling an alert every weekday would generate a 100% success rate, however EIC recognises the negative impact this could have on our clients. Businesses would incur major damage to revenues if required to turn down their production each day for 4 months ‘just in case’. At EIC our aim is to provide as few alerts as possible. Over the 2023/24 Triad period we called just 23 alerts, comparing favourably against a supplier average of 28 alerts.
How EIC can help
With the confirmation that from April 2023 residual TNUoS charges are calculated using a capacity based methodology, now is the perfect time to undertake a capacity review on all of your HH sites. EIC’s Capacity Review service is a fully managed end to end offering. We undertake detailed analysis for each of your sites, outline potential savings and offer clear advice on what action you should take. If we find that your capacity can be reduced by more than 50% it may also be possible to apply for an immediate charging band reallocation which could significantly cut your DUoS and TNUoS charges.
EIC can also help you accurately budget and forecast your energy prices with confidence with our Long-Term Forecast Report. Our team of specialists work hard identifying trends, examining historical figures and forecasting for the future. The Long-Term Forecast Report is a valuable tool which illustrates the annual projected changes to your energy bills and calculates your energy spend over the next 5, 10, 15 or 20 years. This allows you to confidently forward budget and avoid any nasty surprises. Whilst we can’t prevent the rise of non-commodity charges, we can ensure you are fully prepared for the increases.
For more information please visit our website:
https://www.eic.co.uk/services/smart-procurement/long-term-forecast-report/
