DISTRIBUTION CHARGES -V- PURE WHOLESALE PRICES

Did you know that only 40% of your energy bill is for energy? Third Party Charges (TPC’s) make up the other 60%.

So, what are TPC’s? Some examples are, the Climate Change Levy (CCL). Network costs which are needed for construction and maintenance to balance our electricity networks. This is a requirement for getting power from where it’s produced to where the supply is needed. Investment fees needed to decarbonise the electricity sector are also included in the 60%.

TPC’s have been affected by the changing environment. Unfortunately, they are another victim of Covid-19, but they have also been impacted by renewable generation which is needed to meet our NetZero goals.

The first national lockdown in March 2020 resulted in the largest fall in demand of electricity that the UK has ever known. It also led to a drop in commodity prices globally. For the first time ever fossils fuels were overtaken by renewable energy to be the UK’s largest electricity provider. As a result, 39% of the UK’s electricity was supplied by wind, solar, hydropower and biomass. Oil prices fell negative for the first time. We have seen some recovery from this but unfortunately at greater cost to us. Lockdowns 2 and 3 were in colder months so the demand for energy was still relatively high.

National Grid have confirmed their 2021/22 tariffs will increase by approximately 10%. Half hourly tariffs have increased by 2% and non-half hourly by 6% compared to 2020/21.

The renewables obligation has been set at 2.5% higher than expected, as a result of the Coronavirus pandemic.

As a result of the UK’s glorious abnormal heatwave in April-May 2020 (FiT) feed in tariffs have increased by 20%.

It will be interesting to see how the future of energy supplies and the NetZero target will continue to affect TPC’s. If you have any concerns regarding your energy bills or TCP’s please do not hesitate to contact us to discuss.