Posted on: 15/02/2017
Businesses could see their energy bills increase by up to 10% this year, thanks to the impact of the Capacity Market and rising Renewables charges. Also, a shake-up of DUoS charging on the horizon could have major impacts from next year.
Head of Pricing Gavin Baker previews our latest non-commodity costs forecast ahead of our webinar later this week.
Capacity Market shapes the landscape for 2017
Over the last two months, we’ve seen two Capacity Market auctions. The T-1 auction closed at £6.95/kW for the year ahead and T-4 closed at £22.50/kW for 2020/21. To the surprise of the industry (and the relief of the bill payer), these prices were lower than anticipated. The final prices were driven down by the auctions being over-subscribed and the willingness of existing coal generation to accept low prices for their Capacity Market contracts at the expense of more demand side management.
We will discuss the auction results in our webinar and share our forecasts of Capacity Market costs out to 2020.
No decision yet on Energy Intensive Industries(EII) Exemption
The impact of the EII Exemption is creating a lot of uncertainty for energy bills this year. The Government is planning to exempt EII businesses from the cost of the Renewables Obligation (RO) and Small-Scale Feed-in Tariff (FiT), which means the extra cost has to be picked up by non-exempt businesses. But the scheme is still pending State Aid approval, so we don’t know yet when it will come into effect or how much EII volume will be included in the exemption.
To help customers budget for this increase, we will be exploring the high, mid and low scenarios in Thursday’s webinar.
DCP228 changes DUoS charging from 2018
Since our last webinar in November, yet another industry change has come to fruition. The DCP228 modification will change the DUoS charging methodology, making it more cost reflective across red, amber and green bands. In terms of its impact on bills, there will be winners and losers, with businesses generally finding that the changes see their DUoS costs increase, to the benefit of domestic customers who see generally see a cost reduction.
Join our webinar to hear more about DCP228 and what it could mean for your bills from April 2018.
Last chance to register for the webinar
With industry change imminent so early on in 2017 and many developments to stay on top of this year, why not join our action packed 30 minute non-commodity cost forecasts webinar this Thursday - 11am for consultants and 3pm for supply customers.
> Consultants Webinar, 11am, register here
> End User Webinar, 3pm, register here