DCP 161 came into force on 1st April 2018. This new measure has been introduced by Ofgem to ensure that half hourly (HH) supplies that exceed their assigned available capacity pay significantly more for the excess. Pre April 2018, if a supply exceeded its available capacity, other than the charge the supplier adds for the excess kVA at the standard available capacity rate, no penalty was charged. As a result, there has been little incentive for end users to actively review and increase capacity where required.
It is a change to the DCUSA (Distribution Connection and Use of System Agreement) that has led to the introduction of excess capacity penalties for half hourly electricity supplies. This change has ensured that the additional costs that DNOs (Distribution Network Operators) can incur when customers exceed their available capacity levels are recovered.
Previously, businesses that exceed their capacity were charged the same amount for the excess energy they use at their contracted rate, offering little incentive to review and extend their agreed capacity with DNOs. Through the introduction of DCP161 Ofgem is hoping that it will encourage consumers to do this instead of running over and incurring unnecessary costs
To avoid usage exceeding capacity levels it is essential to understand the available capacity and maximum demand levels of these supplies. Any sites that are incurring excess capacity charges will need to agree a revised capacity or take energy-saving measures to reduce their maximum demand.
The Utility Buyers can guide clients through DCP161, determining whether your business is liable to Excess Capacity charges and establish whether an increase or decrease in capacity is required.
Additionally, our team of energy management specialists can advise on abatement measures geared towards reducing energy consumption.