Charging Models Revised to Keep Pace with Change and Innovation in the Energy Sector

June 4, 2018

ElectraLink, the UK energy market data hub and expert provider of governance services, has been leading the smooth implementation of new, agile distribution charging models on behalf of the Distribution Connection and Use of System Agreement (DCUSA).

ElectraLink is proud to be working in partnership with new service providers, Cambridge Economic Policy Associates (CEPA) and TNEI, to improve the market’s understanding of Distribution Use of System (DUoS) charges and the regulatory changes required to support the proliferation of distributed energy resources (DERs) and the transition of Distribution Network Operators (DNOs) to Distribution System Operators (DSOs).

In 2017, against the backdrop of significant market change, ElectraLink managed the procurement of a new modelling service provider, appointing CEPA and TNEI.  These service providers have since developed an innovative set of models, which were approved by the DCUSA board on May 24th,2018.

The new models are designed to be more user-friendly and intuitive, allowing the DNOs to track through the calculations and ensuring other DCUSA parties understand the driving force behind any changes DUoS charges. The new models must accurately account for c.£8bn of industry annual revenue, comply with the DCUSA legal text and provide transparency and accessibility for users. They will shortly be published on the DCUSA website and will be used for any tariff setting and any change proposal impact assessments that take effect from April 2020.

According to Stefan Leedham, Director of Governance Services at ElectraLink: “The new models represent a key milestone for governance services as we believe they set a precedent for the future of governance services, enabling those without prior access and understanding to interpret them much better. This in turn will assist at the embryonic stage of any new charging methodology change proposals, providing a benchmark for excellence.

“The methodology will help to support Ofgem’s Charging Future Forum, as do the principles of DCUSA which call for industry to be more aware of the wider context and to thoroughly pre-evaluate any charging methodology proposals. Cross-sector collaboration, with broad teams working effectively together is now essential if we are to successfully navigate innovation and in the wake of the current wave of change.”

Commenting on the work Patrick Taylor, a CEPA director said: “The CEPA-TNEI team has developed an important set of tools to support the GB electricity industry. The complex brief was intellectually stimulating to fulfil and the effective co-operation between all stakeholders helped to ensure the delivery of a top quality, robust suite of models.”

 

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