Business Electricity: What is the Targeted Charging Review (TCR)

The Targeted Charging Review (TCR) is an Ofgem initiative that aims to modernise the electricity network and ensure the fair allocation of Transmission and Distribution charges for businesses and consumers. Some changes took effect from 1 April 2021, and following further changes that were actioned on 1 April 2023, FPA Consulting is advising all businesses that use electricity to review their arrangements to ensure their tariff still suits their needs.

What has changed?

The biggest change implemented as a result of the TCR is the way suppliers are charged for transmission (TNUoS) and distribution DUoS charges.

Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges are the costs for transporting energy from the point of generation across the National Grid, and on to end users. These charges can account for 16% of most business electricity bills. Depending on their Available Supply Capacity, organisations could see significant increases to their bills as a result of the new charging model.

How does this affect my business?

In simple terms, the changes are intended to make the supply of energy fairer based on ensuring those with the highest demand on the supply network, to meet their electricity consumption needs, pay a higher share towards the maintenance and support of the grid.  Whereas those with lower consumption, and therefore less network demand, will pay less towards its maintenance and support.

So, if your demand/consumption is high you may have to pay a higher charge towards maintaining the grid, whereas if your demand/consumption is low, you may see a decrease in charges.

Organisations that do not have their Available Supply Capacity optimised in-line with their ongoing operations may find that they pay significantly more than they do now for both distribution and transmissions costs in the new fixed charging regime.

What action should be taken?

As a result, many organisations are analysing their supply and consumption, reviewing contracts and may also be looking at alternative ways to generate power from sources such as solar and wind.

We are advising business energy users to review their Available Supply Capacity. By adjusting the ASC, you may move into a lower charging band and reduce your charges accordingly.

How can FPA Consulting help?

The ability to negotiate the best deals and the fact that our clients enjoy a close working relationship with our dedicated energy team are the main reasons why people chose to partner with FPA Consulting.  We always ensure you are offered specialist advice and that your energy supply arrangements are based on the needs of your business.

Our totally independent service provides unbiased advice with access to the wider energy market and the ability to analyse complex supplier offers based on your consumption profile, enabling us to provide you with the most cost-effective energy supply arrangements available.

This service also includes supporting you to build a reliable and energy-efficient infrastructure. Whether you need permanent or temporary supplies, using our market insights and forecasting of your electricity consumption we will find the best tariff for your business.

Contact us on 01332 604321, send an email to enquiries@fpaconsulting.co.uk,   or complete the enquiry form below to discuss your requirements with one of our energy pricing specialists.

Post by:

Ian Coates

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