Triad Results 2022/23
The results for the final Triad season has been released, and is now being replaced with the Targeted Charging Review (TCR).
It’s the end of the Triad as we know it
National Grid have published the three Triad dates for the 2022/23 season, which are listed in the table below. It was the first time a Triad fell on a Friday since 2013, which was missed by all suppliers due to the low peak demand forecast issued by National Grid.
There was a slight increase in the number of Triad calls this year, with EIC issuing 23 alerts in total. This compares favourably with other suppliers who called an average of 28 alerts across the Triad period.
Triads are 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. This means consecutive days of high demand won’t result in multiple Triads.
Previously, consumers were able to lower their final transmission costs by responding to Triad alerts and reducing demand. However, this winter was the last one to benefit fully from Triad avoidance as, from April 2023, transmission charges will mainly be determined by a series of fixed charging bands.
Fall in average demand due to high prices
While maximum demand remained at a similar level to the last few years, average peak demand fell by 2.4GW or 5.8% from last winter. The drop in average demand was mainly due to the record high electricity prices seen over the winter, as businesses and households were more conscious about reducing demand.
Most of the winter saw above seasonal normal temperatures which also helped to subdue demand. However, December and January both experienced long cold spells which supported a rise in peak demand. The maximum demand for the winter occurred on 15th December at the end of ten consecutive days of sub-zero temperatures.
Friday Triad takes forecasters by surprise
The third Triad fell on a Friday for the first time since 2013 and was missed by all suppliers, as National Grid’s peak demand forecast was around 1.2GW lower than the outturn. Over the winter, there were 39 weekdays with a higher peak demand forecast than 2nd December. This means that 40 Triad alerts would have been required to hit all three Triads, which translates to an alert issued on 47% of weekdays.
Considering the first three weeks of November were very mild with no Triad alerts, hitting all three Triads would have required an alert to be issued on 56% of weekdays between 21st November and the end of February. When the Christmas period is removed this figure increases to 62%.
This highlights the faults in the current Triad methodology and supports Ofgem’s Targeted Charging Review (TCR) decision to move the residual element of TNUoS costs to a fixed charge. This 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.
What next for Triads?
From April 2023, TNUoS charges will mainly be determined by a series of fixed charging bands. 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 that for a typical low voltage site in charging band 1, the Triad element makes up less than 20% of the total TNUoS charge, where applicable.
For the majority of consumers, the TCR changes will lead to a reduction in transmission costs. However, sites currently taking Triad avoidance action are likely to face an increase in TNUoS costs from April 2023, as the effect of Triad avoidance is removed. 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 bands 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.
How EIC can help
With the confirmation that from April 2023, residual TNUoS charges will be 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/
