Challenging Winter Ahead for Triad Season
Winter is fast approaching and the Triad season will soon begin. This is an important time for many large UK consumers as they seek to lower transmission costs by reducing demand during potential Triad periods. Triads are three half-hour periods with the highest electricity demand between the start of November and the end of February and each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads.
If your electricity contract allows it then reducing your demand at these specific points will result in lower transmission charges. However, knowing when Triads occur is a complex business so, to help our clients, EIC provides a Triad Alert service. We have successfully forecast each of the three Triad periods for the last 8 years, saving customers millions of pounds in transmission charges.
Pandemic continues to suppress demand
Winter peak demand is at its lowest point since 1992/93 and is now 14 GW (~24%) lower than the peak of 2010/11. There are a number of factors that have contributed to the fall in peak demand over the past decade. These include improvements to the energy efficiency of appliances, an increase in LED lighting and a rise in embedded generation.
However, in 2020 we can add another significant contributor to demand reduction. The coronavirus pandemic has led to a dramatic fall in peak demand since mid-March. Demand has increased since lockdown ended but is still lower than previous years.
National Grid are currently forecasting peak demand over the Triad period to be around 43-44 GW, slightly lower than last winter’s peak of 45 GW. The winter demand forecast looks to be flatter than previous years, making predicting when Triads will fall far more challenging. It is therefore important to receive Triad alerts from a trusted and reliable source such as EIC.
EIC’s record of Triad season success
EIC has an in-house model which has successfully forecast every triad period for the last eight 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. Businesses can then take action to avoid high usage during these periods, while minimising disruption to everyday activity. We also monitor the market throughout the day and send out an afternoon alert in the event of significant change. The daily report can also help you plan ahead with an overview of the next 14 days alongside a long-term winter outlook.
Calling daily alerts would generate a 100% success rate, however this could have a negative impact on our clients. Organisations would incur major damage to revenues if required to turn down their production each day for 4 months ‘just in case’ and at EIC our aim is to provide as few alerts as possible. Over the 2019/20 Triad period we called just 13 alerts while the average supplier issued over 20.
Triads granted extra year
In December 2019, Ofgem published their final decision on the Targeted Charging Review (TCR). The main outcome of this decision is that, from April 2021, the residual part of transmission charges will be levied in the form of fixed charges for all households and businesses. However, as a result of the coronavirus pandemic Ofgem has decided to delay this by a year. This provides an extra opportunity for consumers to benefit from Triad avoidance before TCR changes arrive in April 2022.
With the TCR, Ofgem aims to introduce a charge it considers fair to all consumers, not just those able to reduce during peak periods. For the majority of consumers these changes will lead to a reduction in transmission costs. However, for those who are currently taking Triad avoidance action it is likely that their future costs will rise.
How we can help with Triad season
We have helped hundreds of clients avoid these transmission costs by providing them with the tools needed, giving EIC an enviable track record in Triad prediction.
Last year, our customers cut demand by an average of 41% compared to standard winter peak-period half-hour consumption – resulting in significant cost savings. Clients who responded to our Triad Alerts, saved on average £180,000. Our best result last winter saw a client saving nearly £1 million in TNUoS charges.
The Triad season starts on 1 November. Find out more about our Triad Alert service.
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