With new energy measures coming into effect in just two months, Kinect Energy Group is reminding (manufacturers) that they could risk paying more for their energy use if they don’t adapt.
Businesses face the prospect of paying significantly more for energy that exceeds their assigned capacity, under the new DCP 161 measure to be introduced by Ofgem in April.
DCP 161 will dictate a change to the Distribution Connection and Use of System Agreement (DCUSA) and will introduce severe Excess Capacity Penalties for businesses that over-use their half-hour energy supplies.
So, what does this mean for the (manufacturing) sector?
Amar Hussain, managing director at Kinect Energy, said: “The changes are intended as a means of recuperating costs incurred by Distribution Network Operators (DNOs) when customers exceed their available capacity levels and represent a significant shift from current rules.
“Currently, any business that exceeds its allocated capacity is charged for usage at the usual rate, but manufacturers who do not increase their capacities in accordance with the new measures could face hefty financial penalties.
“The excess penalty rate will be as much as three times the standard rate and costs will be higher in areas where demand for capacity is high. It is crucial that businesses and organisations in the manufacturing sector that haven’t already made changes understand the implications of Ofgem’s new measures.
“An energy consultancy can help businesses change their assigned energy capacity before the measures come into effect, provide information about what the measures mean in practice for them and offer guidance through the process.
“If you haven’t done anything yet, there is still time, but National Grid is already working to balance the network, so we are advising businesses to move quickly to avoid issues further down the line.”
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