Ofgem will introduce a new measure to ensure that half hourly supplies that exceed the assigned available capacity will pay significantly more. DCP 161 is a change to the DCUSA (Distribution Connection and Use of System Agreement) that will introduce Excess Capacity penalties for HH (Half Hourly) electricity supplies. The change is being introduced from 1st April 2018 to recover the addition costs that DNOs (Distribution Network Operators) can incur when customers exceed their available capacity levels.
Currently, there is no penalty if a supply exceeds its available capacity beyond the charge the supplier adds for the excess kVA in the month of the breach at the standard available capacity rate. The amounts are often minimal giving no incentive for users to review and increase capacity where required.
DCP 161 means that from 2018, users will be charged an excess penalty rate which could be over three times higher than the standard rate. The applicable rates have not yet been published and will vary by region and voltage. It is expected that is areas where demand for capacity is high the costs will reflect this. If a supply is regularly exceeding its assigned available capacity, this change could increase the overall electricity costs by up to 1-2% or more depending on the consumption profile.
Where a supply is not exceeding the available capacity level, this change will not have any impact unless there is any planned increase in usage. If this is the case it is vital that a review is undertaken and an increase to the available capacity applied for to avoid incurring significant additional costs.
For supplies that have been or will be converted to half hourly as a result of P272 (profile class 05-08 NHH supplies), these will be settled on the HH market by the time DCP 161 comes into effect. It is vital that the available capacity and maximum demand levels are understood in case these supplies are exceeding the available capacity levels.
Any sites that is incurring excess capacity charges need to agree a revised import capacity or take energy saving measures to reduce demand at peak times to avoid these charges. If you would like any assistance with this or require further clarification, please email the compliance team at compliance@carbon2018.com, complete the contact form or call Melanie Kendall-Reid on 01252 87 87 22.