Demand users who are connected to the transmission network on a boundary between different demand zones will pay an average Transmission Network Use of System (TNUoS) charge, under changes approved by Ofgem.
A code modification to the Connection and Use of System Code, approved by the regulator Ofgem, was needed due to a number of demand users being expected to connect at a boundary point between multiple distribution network operators (DNOs) during the 2022/23 charging year.
Transmission connected demand users are grouped in demand zones according to the location of their local Grid Supply Points (GSPs). These GSPs match the boundaries of the DNO regions.
TNUoS demand tariffs are calculated by means of a weighted average of all demand sites nodal costs within the same demand zone, using the ‘week 24’ nodal demand MW values to determine the weighting.
However, the code did not previously set out how the TNUoS – and therefore the TNUoS demand tariffs – should be determined when a demand user is connected to a transmission substation which feeds multiple DNOs via its local GSP.
Code modification CMP379 determines that these ‘boundary point’ users, which are primarily energy storage systems, should pay a demand tariff based on the average zonal tariffs of the relevant DNO zones.
This will apply to both Peak Security and Year Round tariffs from 1 April 2024.
The Electricity System Operator (ESO) had initially proposed to set the charges according to a ‘predominant DNO’ for the GSP, determined by the DNO with the highest local net demand, which could change annually.
However, at a workgroup meeting the ESO was asked to consider using an average of demand zones instead and changed its proposals after agreeing it was a more effective approach.
On approving the modification, Ofgem said the change would likely “represent an improvement to cost-reflectivity”.