The TRIADs are coming (again)!
Whether you use electricity or generate electricity and export it to the grid the TRIADs are important and from 1st November to 28th February it is ‘TRIAD season’.
Whilst TRIAD income for generators is worth much less than it used to be (zero in some cases now) TRIAD alerts are still a good reminder to be on the ball and ready for high export prices later in the day. If you import electricity reducing consupmtion during TRIADs is still very much worthwhile if it is practical to do so.
What are TRIADs? – a quick refresher
The Distribution Network Operators (DNO) pay what you might call a standing charge to National Grid (NG). This charge is set according to the amount of electricity being drawn by the DNO when the UK as a whole is using the most. More specifically, it is the average MW being drawn during the three highest half-hour periods (subject to them being a minimum of 10 days apart) of UK electricity consumption between 1st November and 28th February inclusive.
The cost incurred by the DNO is then passed on to energy suppliers who in turn charge it to their customers.
The tricky part in all of this is that we only know when the three highest half-hours were once the season has ended. After all, it could always be higher ‘tomorrow’.
I import electricity – why should I be interested?
The bottom line is that reducing your electricity consumption during the TRIADs can reduce your costs if you have what is called a half-hourly settled electricity meter.
Even if you have a half-hourly meter you might not see a TRIAD cost line on your electricity bill because it is built into the final p/kWh price. But the TRIAD still affects how much you pay because your pattern of use ‘last year’ is used by energy suppliers when they quote you a fixed p/kWh rate for this / next year.
Larger consumers tend to have flexible or pass-through contracts where the TRIAD cost is listed separately and charged according to the actual amount of electricity used during the three TRIAD half-hours.
The charges vary depending on location. In general, the further north you are the cheaper is gets (less demand, more power stations). In Northern Scotland you pay £21/kW, this increases to £48/kW in Yorkshire and £59/kW in London. So for a business using say 100kW in Yorkshire during each of the three TRIADs the bill will be £4,800.
Having said all of this, the disruption caused by shutting down production lines etc. means that avoiding TRIADs is not always practical.
I export electricity – why should I be interested?
If you export electricity to the grid via your DNO you are what is called an embedded generator (EG). If you export into the DNO's network during a TRIAD it reduces the amount that they are taking from NG. This in turn means that they pay less to NG. With the right type of Power Purchase Agreement (PPA) this saving is passed on to you the generator.
Having said this, changes in recent years have reduced the value of this considerably. Three years ago a generator in Yorkshire could earn £44,000 per MW of export and along the south coast it was more than £50,000. This winter essentially anywhere north of Coventry will get nothing and the south coast will get c. £8,000.
So doom and gloom for embedded generators?
In part yes, TRIAD income used to be a nice chunky income stream. But it was always a nervous time because so much income was at risk if your CHP or what have you didn’t run.
However, with there being less incentive for higher cost generators to run whenever there might be a TRIAD the electricity price is likely to be higher during the classic TRIAD hotspot of teatime on weekdays. So efficient, lower cost generators such as natural gas CHP that can react to short-term price spikes will be able to take advantage.
If you are new to TRIADs and want to know more or want some help to make sure you are maximising the benefits get in touch.
