Our insights show a potential increase of up to 778% in unavoidable standing charges, varying across UK regions. Distribution Use of System (DUoS) is specifically related to charges which support the distribution of electricity from generators to individual homes and businesses.
The DUoS charges cover the cost of maintaining and operating the local electricity supply through the distribution network operators (DNOs) infrastructure, including substations, transformers, overhead lines, and underground cables. These charges also account for various services related to ensuring a reliable supply of electricity to end-users.
The DUoS Charge is generally made of three key elements:
Type | Description | Units |
---|---|---|
Variable Rates | Charged depending on when you consume during the day (Super Red, Red, Amber and Green). | p/kWh |
Standing Charge | All electricity supplies must pay for your connection to the grid. | p/day |
Capacity Charge | Only charged to larger consuming meters for their demand from the grid. | p/kVA/day |
It has been noted that several DNOs have published forecast charges from 1st April 2024 that show a significantly greater increase in year-on-year than previously anticipated.
The primary factors behind the increased tariffs projected from April 2024 are driven by increased inflation expectation, based on trends from last year as well as a correction for cost under-recovery from prior years, through the reconciliation of inflation.
The rationale behind this lies in the operational constraints faced by DNOs when establishing final tariffs as they rely on forecasted inflation and subsequently adjust to align with actual figures once the tariffs for the following year are unveiled.
Depending on the area your supplies are located you might observe different changes. Some DNO’s have decided to recoup for lost revenue through increasing all 3 elements of the DUoS charges where others have made the decision to only increase the standing charges to guarantee this lost revenue. For these areas specifically, supplies may see a greater increase on their standing charges alone.
In addition to this, the DNO for London has also published a modification in the rate structure to accommodate for meter types that were not present historically.
Depending on your type of contract, additional charges and any increases may not be as visible, i.e. If you are on a fully fixed contract that crosses April-24 and was places prior to this date, you may find that your standing charge is a blend of current and future costs, and the overall increase is therefore spread across periods.
If you are on a pass-through agreement for your third-party charges or your supply is on out of contract rates, you may only see these increases from 1st April 2024.
Optimised can help prepare and mitigate impacts, by developing a strategy and tapping into our support packages to manage and reduce energy costs.
Tailored strategies to minimise the impact on your electricity bills.
We've crunched the numbers for you, to help you understand the specific changes in your area.
Proactive measures to navigate and optimise your energy consumption.
Reach out for a consultation to safeguard your business from unexpected electricity cost hikes. Let's explore how we can tailor solutions to your unique needs.
In the table below, you can see a snippet of exclusive analysis of the standing charge changes. If you want to access the full analysis and Optimised expertise, complete the form below.
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