Non-commodity charges make up more than half of a typical business energy bill. We provide regular forecasts of these costs along with policy and regulation updates to help our customers stay up to date and budget accordingly.
What are non-commodity costs?
These are the costs on a consumers' energy bill for system and network charges, environmental costs and support schemes. These charges include:
- Renewables Obligation (RO) - the RO is a responsibility on Electricity Suppliers to source an amount of their supply position from renewable sources. Eligible renewable generators receive Renewables Obligation Certificates (ROCs) for each MWh of electricity generated and these certificates can then be sold to suppliers in order to fulfil their obligation. The subsidy payment for RO generators is paid for by electricity consumers through their supplier.
- Feed-in Tariff (FiT) - a subsidy scheme introduced in 2010 to support small-scale renewable generation in the UK, providing a fixed price set by Government to generators for each unit of electricity they generate. The subsidy payment for FiT generators is paid for by electricity consumers through their supplier.
- Feed-in-Tariff Contracts for Difference (FiT CfD) - CfD generators have a contract with the government-appointed Low Carbon Contract Company (LCCC), guaranteeing them a fixed price for their exported electricity. The subsidy payment for these generators is paid for by electricity consumers through their supplier. See more on EMR charges here.
- Capacity Market - a scheme to secure additional winter capacity from both generators and Demand Side Response providers. Successful bidders receive stable payments in return for commitment to deliver energy when required. The subsidy payment for these generators is paid for by electricity consumers on their consumption in the winter period. See more on EMR charges here.
- Transmission Network Use of System (TNUoS) - these charges recover the cost of installing and maintaining the transmission system in England, Wales, Scotland and offshore. See more on Triads here.
- Balancing Service Use of System (BSUoS) - BSUOS charges represent the costs incurred by National Grid for their actions in maintaining the balance of demand and quality and security supply on the network. BSUoS charges are daily charges received from Elexon (but levied by National Grid) and are paid by suppliers and generators based on their energy taken from or supplied to the National Grid in each half-hour Settlement Period.
- Distribution Use of System (DUoS) - DUoS charging reflects the costs of installing, operating and maintaining the regional distribution networks in the UK. There are 14 distribution networks covering the UK (excluding Northern Ireland) plus a small but growing number of independent networks.
Our latest forecasts
Watch the below highlights from our October 2018 webinar for our latest non-commodity costs forecast:
We hold quarterly webinars to share the latest forecasts from our expert in-house pricing team covering each of the non-energy charges above. Sign up here to receive invitations to our future webinars or speak to your Account Manager.
The information provided in this webinar has been prepared for the exclusive use of the subscriber only and is based on past performance which may not be indicative of future performance. Unless stated otherwise all data has been sourced by SmartestEnergy who reserve all rights to the images and content displayed which should not be reproduced for commercial use. Unless SmartestEnergy provide express prior written consent, no part of this webinar should be reproduced, distributed or communicated to any third party. SmartestEnergy do not accept any liability for actions taken in relation to the guidance provided in this webinar, if this webinar is used for an alternative purpose from which it is intended, nor to any third party.