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DCP228: What Does It Mean For Your Business?

Peak periods are changing

DCP228 changes the way that peak time tariffs work for certain network charges, to distribute costs more accurately across the three time bands: Red, Amber and Green.

The aim is to revise how Distribution Use of System (DUoS) charges are calculated, so that they more accurately reflect the costs incurred by network operators during peak and non-peak periods.

The changes brought about by DCP228 will impact your business’ energy bills and may give you cause to re-examine the times at which you use energy. Here’s our guide to exactly what’s happening, what the practical implications will be, and how you can begin to prepare your business.

What is DCP228?

DCP228 was instigated by British Gas and, following the consultation period and ensuing decision made in September 2016, will be brought into force by Ofgem. It is expected that DCP228 will be implemented no earlier than April 2018, and most likely in April 2019.

The changes will affect how customer tariffs are set under the Common Distribution Charging Methodology (CDCM) and the effect will be a balancing out of DUoS bandings, so that the difference between Red, Amber and Green periods is less significant.

A closer look at DUoS charges

Under the CDCM structure currently in place, charges to customers who use energy during DUoS Red band (peak) periods are much higher than charges during either Amber or Green (non-peak) periods. Under the new structure, charges during Red band periods will be lowered, and charges during Amber and Green slightly raised. The effect will be a flattening of the charging structure.

How will I be affected by the changes? 

All businesses will be affected by DCP228, apart from the UK’s larger electricity connectors whose charges are governed by the EHVDCM Extra High Voltage Distribution Charging Methodology.

For many businesses, DCP228 will unfortunately mean a rise in energy costs, although those with high use at peak times may see a small decrease on their bills. The actual cost impact will vary by region and DNO. An example of how this might affect customers is shown right:

One important effect will be on businesses that have invested in load management systems, as the benefits gained from those systems based upon Duos (and Triad) savings would be reduced. It will have no direct effect on Capacity Market or Frequency Response revenues.

We can help you to identify ways to reduce energy costs and mitigate the impact of DCP228 on your business.

If you would like to find out more, please get in touch with our experts today.

*These costs are based on the latest forecasts for the East Midland Region