Third Party Costs

TNUoS (Transmission Network Use of Systems)

This charge covers the cost of installing and maintaining the transmission system. This cost is increasing due to the upgrade of networks to accommodate renewable generation and to replace ageing infrastructure. The average increase in costs due to the customer for 2016/17

was 16%. From April 2023, how TNUoS is charged moves from a calculated charge to a fixed charge. This is a part of Ofgem’s December 2019 Targeted Charging Review and will affect your bill.

DUos (Distribution Use of System)

This charge is paid to the Distribution Network Operator company that works in the transmission network in the area where the meter is located. This charge increased up to 8.5% in 2018/19 depending on the area of the country.

From April 2022, DUoS charges are changing from a calculated charge to a fixed charge as a part of Ofgem’s Targeted Charging Review.

BSUoS (Balancing Services Use of System)

Balancing the system and ensuring there is enough generation to cover demand is becoming increasingly more difficult and costly, particularly when businesses are in peak demand and when unreliable renewable generation is low.

From April 2021, BSUoS charges are being calculated differently, moving from a net to a gross charge. All these updates from Ofgem are likely to affect your bill for the next few years. If you are unsure what TCR could mean for your business, you can find everything you need to know here.

Capacity Market (CM)

A scheme to secure additional winter capacity from both generators and Demand Side Response providers.

Successful bidders receive stable payments in return for a commitment to delivering energy when required.

This is needed to help secure electricity supplies for the future use of system. The subsidy payment for these generators is paid for by electricity consumers on their consumption in the winter period.

Renewables Obligation (RO)

This is the main framework to incentivise the construction of large-scale renewable electricity generation.

Although this scheme is closing to new business entrants this year, RO will still be a significant charge on customers’ energy bills for several more years.

Contracts for Difference (CfD)

Contract for difference (CFD) generators have a contract with the government-appointed Low Carbon Contract Company (LCCC), guaranteeing to pay them a fixed price for their exported electricity.

The subsidy payment for distribution use of these generators is paid for by electricity consumers through their suppliers.

This scheme has replaced the RO and FiT charges.

Feed-in Tariff (FiT)

FiT is a subsidy scheme introduced in 2010 to support small-scale renewable electricity generation.

The subsidy payment for FiT generators is paid for by electricity companies and consumers pay more.

CCL (Climate Change Levy)

The Climate Change Levy was put in place to encourage a reduction in carbon emissions from renewable power used. Renewable energy buyers were exempt from this tax until 2015 when the Government’s budget changed to apply this charge to all energy users.

Every April this charge is reviewed and the cost increases by a small amount.

BEIS (Department of Business, Energy and Industrial Strategy)

Replacement of the Department of Energy and Climate change (DEC).