enery-invoice

Triads – What Are They and How Do They Work?

I wanted to address Triads in this post, and before you ask, no, I am not referring to the transnational organised crime organisation from Hong Kong. I am referring to the Triad charge or Transmission Network Use of System (TNUoS) charge, which is used for maintenance of the UK electricity grid to ensure future supply.

Thus, the Triads in the spotlight here are the three half-hourly settlement periods with the highest demand, or peak demand if you will, on the system between November and February. These three periods have to have ten clear days between them. You may be asking yourself, why the ten days? Quite simply, it is so that a long extreme cold snap does not dictate all three Triad periods.

It was mentioned that these charges are used to ensure future electricity supply, so the National Grid is trying to reduce these peaks. Why? It is a lot easier to plan demand if it remains steady. The National Grid is in charge of identifying the three highest peaks in the electricity demand and publishing that data every March/April. It then charges suppliers a higher tariff for electricity during Triad periods, ensuring that they recover the necessary revenue for running the UK transmission network.

Typically in the past, Triads tended to occur between 4 PM and 6:30 PM from Monday to Thursday due to the fact that business demand meets the domestic demand during these times and causes a spike. These charges have been increasing from 2009-20151, and, as such, we have seen increases of 36.5% in certain areas to 378% in others. These high charges are the National Grid’s way of urging users not to use energy during those times to allow the National Grid to better manage the demand.

What does that mean for you? The suppliers pass this charge on to end users. You may see it as a separate item on your invoices or, in the case of all-inclusive rates, they are built into the unit rate you are paying. Suppliers also tend to show these charges as separate items under Fixed Charges on invoices issued October-March (most common) or April 2015-April 2016 (less common).

Luckily for users, these charges are directly linked to their demand so they can be influenced directly by effective load management on site. If the site is able to shift demand outside of the above-mentioned periods, you are well on your way to avoid high Triad charges. If you have on-site generators that you can use to offset your demand or other ways to reduce your demand from the grid, you will directly reduce these charges.

This manipulation of energy consumption can be a useful supplement to your overall energy-efficiency measures. However, this shifts your demand temporarily rather than reducing it overall and permanently. Thus, it cannot be used as a substitute for proper energy management.

Most supplier offer Triad warning systems to their large Half Hourly2. (HH) users that give them a warning of predicted Triads. There is no sure way of knowing when a Triad will occur, but these warnings allow you to shift your demand and potentially avoid the high charges associated to Triads.

The National Grid and certain suppliers are now offering a range of services that offer incentives to business that manage their demand. These Demand Response services provide a unique opportunity for major energy users to help the grid manage their demand as well as earn an income from the ability to manage their demand-side loads. This is aside from the savings that can be achieved anyways through load management and avoiding the high Triad charges.

For those of you that are feeling adventurous, you could forecast your Triad charge by using a few simple steps of calculation. Bear in mind this would be a pure estimate and will most likely not match the final Triad charge you pay. However, it serves to show just how much you could be paying in Triad charges:

  1. Take the three maximum demand readings from your HH data for the period from November to March and multiply them by the network operator loss adjustment factor (LAF)3.
  2. Multiply this total figure by the HH zonal tariff4 to get the total annual triad cost.
  3. Divide this figure by the number of Maximum Demand readings (in this case 3) to get your annual Triad figure.

If you are using actual figures above, you can then also calculate whether you are owed money by the supplier or whether you need to pay an additional amount by doing the following:

        4. Subtract the annual TNUoS charge from the total you got in Step 3 to get your reconciled figure.

An example calculation of Steps 1-3 would be as follows:

 

As for step 4:

Scenario 1: You paid £35,525.25, so you would take your Annual Triad Figure of £21,476.63 and subtract the annual TNUoS charge from it (£21,476.63-£35,525.25=-£14,048.62), meaning that you paid more than you should have and your supplier should credit you the above-bolded amount.
Scenario 2: You paid £18,325.83, so you would take your Annual Triad Figure of £21,476.63 and subtract the annual TNUoS charge from it (£21,476.63-£18,325.83=£3,150.80), meaning that you paid less than you should have and you can expect your supplier to invoice you for the above bolded amount.

 

Again, please note that the above table is for illustrative purposes only, and while it can help you forecast your potential Triad charges, it should under no circumstances be used as a basis for actual calculations.


  1.  The data used is taken from the National Grid website and can be found here: http://www2.nationalgrid.com/WorkArea/DownloadAsset.aspx?id=45225
  2.  A HH meter is an electricity meter that is connected via a phone, GSM, or other radio line and automatically sends updated readings to your energy supplier every half hour.
  3.  When electricity is being transported through the grid, there are certain losses. Meaning that not all of the power is transported through and the network has losses.
  4.  http://www2.nationalgrid.com/WorkArea/DownloadAsset.aspx?id=45225
The following two tabs change content below.

Samer Muratovic

Bureau Services Manager at Alfa Energy
Samer (Sam) is the Bureau Services Manager at Alfa Energy and an MBA graduate who has been working in the energy industry for the past five years. He has worked in Sales, various supporting roles, and finally Operations before taking on a role in Bureau Services specialising in Energy Data Management, Optimisation, and new product development. He is currently in charge of teams covering North America, SEE, the EU, and the UK market which service all post-sales deliverables to clients across all market segments.

Latest posts by Samer Muratovic (see all)

What would you like me to write about next?

Samer Muratovic

Samer (Sam) is the Bureau Services Manager at Alfa Energy and an MBA graduate who has been working in the energy industry for the past five years. He has worked in Sales, various supporting roles, and finally Operations before taking on a role in Bureau Services specialising in Energy Data Management, Optimisation, and new product development. He is currently in charge of teams covering North America, SEE, the EU, and the UK market which service all post-sales deliverables to clients across all market segments.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>