The way we generate and use Electricity is changing, so the government is reviewing how network charges are collected, with an added focus on recovering a fair share from each customer. There will be winners and losers.
The current system allows some consumers to reduce their demand at peak times in exchange for lower network charges. This does place an additional financial burden on those that do not.
Going forwards, there will be a greater emphasis on fixed charges, based on the type of customer, metering and expected use. Banding will likely be whether domestic, unmetered and for business customers, total volume or Available Capacity.
From April 2021 Transmission charges will move away being collected via the consumption-based Triad periods and from April 2022, Distribution will have a greater element of fixed costs, moving away from Red, Amber and Green.
As charges have yet to be published, energy suppliers may open their er’s Fixed Price Contracts from April 2021, to invoice additional network costs. They are less likely to give back over payments. Some suppliers may take the view, that with their diverse portfolio, they will not need to make adjustments.
Additional changes are expected from 2023 to look at the remaining charges, based on when Electricity is used. For example, incentives to avoid periods when Electric Vehicles will be charged.
Indigo Swan will continue to engage with suppliers and provide updates. We are more than happy to discuss how we can support you through this change.