DCP228 – The change and the impact

Thursday 30th March, 2017

What is DCP228?

DCP228 is a change to the way that distribution Use of System (DUoS) costs are calculated in order to more accurately reflect the costs incurred by network operators across the three time bands: Red, Amber and Green.

Currently the highest charges are during the red band period which is typically 4-7pm, with significantly lower charges during the amber (day) and green (night) bands when demand on the electricity system is lower. After April 2018 DCP228 will come into force and the charges will be distributed more evenly, bringing red band charges down and amber and green band charges up comparative to the current situation. An example of how this might affect you is in the table below.

Who will this affect?
All businesses will be affected by this change other than those larger UK electricity connectors whose charges are governed by the Extra High Voltage Distribution charging Methodology (EHVDCM).

Suppliers have set out that those consumers with pass-through contracts will be affected by the change on the implementation date of the 1st April 2018, whereas those on fixed contracts that extend beyond 1 April 2018 will not be affected until their renewal date.

The impact assessment released by OFGEM stated that “domestic and non-domestic ‘single rate’ consumers would generally face a reduction in charges” and “two rate (Day/Night rate) consumers would face a small increase in charges” and, “the net effect is that charges for HH consumers in aggregate will rise.” The actual cost impact will vary by region.

Half hourly and P272 customers will see a reduction in red band charges but an increase in amber and green bad charges. If you are a high consumer during the red band period then this change could mean an overall reduction in your bills.

How do I make the best of it?
This change should be a prompt to review your consumption profile through the day and see if you can shift your demand to the most cost effective time of day.

For those that have already invested in measures such as demand side response and triad avoidance there may be a reduced benefit for these schemes. However OFGEM have stated that these are “still likely to be financially beneficial to those consumers.” The change will have no direct impact on Capacity Market or Frequency Response revenues.