A suppliers Bill – What Lies Within

Andy Eades

Business Development Manager

npower Industrial & Commercial

Question……?

What % of an invoice is for the Energy?

Components that make up a typical Electricity Invoice (2014)

Components that make up a typical Electricity Invoice (2014)…..

TLoSS

BSUoS

TNUoSDLoSS DUoS

CCL

ROEMR

CM

CFD

VAT

DC

DA

= £ Final Bill£\ MWhFiT

HDCL

Transmission – BSUoS, TLoSS, HDCL & TNUoS

Distribution – DLoSS & DUoS

Third Party Charges:

Transmission (National Grid)Transmi ssi on Net work Use of Syst em ( TNUoS) charges recover t he cost of i nst al l i ng and mai nt ai ni ng t he t ransmi ssi on syst em i n Engl and, Wal es, Scot l and and of f shore. Transmi ssi on cust omers  pay a charge based on whi ch geographi cal zone t hey are i n, whet her t hey are generat i on or suppl y and t he si ze of t hat generat i on or suppl y. TNUoS t ari f f s   are  publ i shed by 31 January and t ake ef f ect f rom 1 Apri l each year.

( Dat a provi ded by Nat i onal Gri d 2014)

Third Party Charges - Distribution

DNOS (Distribution Network Operators) own and operate the distribution network that bring the Electricity from the Grid to homes and businesses

Example of DNO Charges (2014) : Example Western Power Distribution (South West)

(Data WPD Published Rates 2014)

Government Levies\Policy:Feed in Tariff (FiT) - A government initiative to incentivise new investment in small-scale low carbon electricity generation. Participants are rewarded through payment for electricity generated at guaranteed rates for the next 20-25 years. To fund the scheme, the costs of FiT will be recovered from all suppliers based on their market share, through the 'Levelisation Process' operated by OFGEM. Suppliers will then pass this cost through to end users on an estimated basis, with quarterly reconciliations once costs are confirmed. (0.293p\kWh)

Renewables Obligation (RO) - A requirement placed on suppliers to provide a proportion of their supplies from electricity generated from renewable sources. Extra supplier costs to meet the Obligation are passed on to customers. The obligation began as a requirement to provide a growing percentage of their supplies from ‘green’ sources. It has since become an order to provide an annually increasing number of ROCs per MWh supplied (0.97p\kWh)

Climate Change Levy (CCL) - Tax in applied in the UK on the business use of energy that was implemented April 2001. The GB levy applies to gas, electricity, coal and LPG, but not oil. Rates can be changed periodically by the GB Government. Renewables are exempt. (0.541p\kWh)

ENERGY COSTS ARE FORECAST TO RISE

RWE npower 10/08/14 10

Impact of policy costs on electricity prices

policies account for 6-19% of prices

increases to 19-47% Increases to 32-71%2013 2020 2030

Estimated average price without policies

Estimated average price with policies

2013

71

2020

79

2030

78

26 28 29

Estimated impact of policies

1 1 1

2013

4

14

2020

15

37

2030

25

55

2013

27

75

85

2020

29

94

116

2030

29

103

133

Gas£/MWh

Electricity£/MWh

Costs added up

Example Costs

Energy 6.3p\ kWh

Transmission 0.97p\ kWh

Distribution 2.8p\ kWh

Supplier Fee 0.3p\ kWh

Government Levies 1.8p\ kWh

Total 12.17p\ kWh

How can we mitigate and manage the cost?

CONSUME LESS PARTICIPATION COST CERTAINTY

WORK IN PARTNERSHIP WITH YOUR ENERGY SUPPLIERWORK IN PARTNERSHIP WITH YOUR ENERGY SUPPLIER

SMARTER CONSUMPTION

Thanks You ..……

Any Quest i ons?