Ofgem and National Grid propose changes to business electricity charging

Ofgem, National Grid, electricity market, load shedding
All change in the business electricity market

Two of the national bodies for distributing and overseeing the country’s electricity market are working on proposals that will impact how businesses pay for their power – and how much.

The traditional time-of-day and seasonal peaks that the grid faces over the year are offset in two ways. Firstly, National Grid pays incentives to embedded generators (EGs) to boost electricity input into the grid. Secondly, electricity prices for businesses are raised to encourage them to be more efficient at those times.

The changes proposed involve major cuts to EG incentives from £45 per kW to somewhere between £3 and £7 per kW. What’s more, as more businesses have become adept at load shedding during peak times, National Grid is becoming less inclined to apply seasonal raises in electricity costs. The proposal seems to be that as load shedding isn’t available to all businesses, it would be fairer to raise the price of electricity overall.

The end of consultation on these proposals should be the end of 2017, but the impact on energy costs and availability for businesses will be significant. See our News Analysis.

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