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For larger businesses, triad charges are a fact of life. If you are on half hourly metering – not to be confused with having a smart meter – you will pay triad charges. But what are they? And why are they so expensive?
If you’re a small business, you can look away now – you’re not getting charged for triad periods. If you are eligible for triad charges, they’ll be covered by the ‘fixed charges’ section of your bill. Triad charges are aimed at large and industrial users of energy, the point being that if you make energy really expensive at times when the national grid is under stress, businesses will stop using as much energy and demand will drop.
Triad periods are half hourly periods of peak usage which occur between November and February each year. There have to be ten days between each triad period, meaning that the triad periods may not cover all periods of highest demand.
Triad periods have been in use since the early 90’s, and are generally well received. Whilst charges are forecast to rise, and you’ll pay a fortune if you use a lot of energy in a triad period – over £20 for boiling a kettle – suppliers are pretty good at predicting when they’ll be. By concentrating peak energy charges to just three occasions, businesses pay a lot less than if they were charged a premium every time energy demand spiked.
Triad periods are never confirmed in advance, however suppliers do attempt to forecast them. If you’re eligible for triad charges you’ll probably receive warning notices from your supplier, which are preceded by a notice of ‘tight demand’ from the National Grid. These periods tend to happen when times of peak business energy usage coincide with spikes in domestic demand. Usually, this will be during a particularly cold snap – but it doesn’t have to be, and milder winters make triad periods harder to predict. As high business energy use and high domestic use need to coincide for a triad period to occur, almost all triads happen in the late afternoon on weekdays.
Ironically, triad warnings can help to avoid triad periods themselves – if energy usage drops enough then demand is lower and the triad period doesn’t occur.
Some businesses reduce their usage up to 30 times over the winter period, by cutting down the amount of energy they use or switching to backup generators, in an effort to avoid triad charges. Nothing can guarantee avoidance of the charges, but businesses who use less energy usage will see lower bills regardless.
The National Grid releases dates of the latest triad periods on or around 24th March each year.
Ofgem is currently consulting on charging arrangements for embedded generation – where certain energy generators are incentivised to feed energy into the grid during periods of high demand, in March the energy regulator cut the amount of incentives paid to small businesses, claiming that they were being over-rewarded. Depending on the results of this consultation, triads could be a thing of the past.
Last year’s triad periods were as follows:
5th December 2016
5th January 2017
23rd January 2017
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