TABLE OF CONTENTS Generators and electricity suppliers (retailers) directly connected to the electricity transmission grid pay a series of charges for using the network that can be avoided by using local generation.
Transmission network use-of-system (TNUoS) charges are paid by generators and suppliers directly connected to the electricity transmission grid. TNUoS charges relate to the costs of managing and maintaining the transmission network. The charges vary for both generators and suppliers according to their geographic location and the demand for grid usage at that location.
So, generator TNUoS charges vary by location and are based on the generator's capacity. Supplier charges vary by location and are levied on the supplier's peak demand, measured at the three half-hours of highest system demand (known as the triad).
There is also a charge for transmission losses. Up to 2 per cent of the electrical energy generated in England and Wales is lost in the transmission system. This happens because a proportion of the current flowing in transmission lines, cables and transformer windings is dissipated through heating effects. These losses increase with the distance the electricity has to travel. These costs are divided between generators and suppliers on a 45/55 split.
Generators and suppliers connected to the transmission network also have to sign the Balancing and Settlement Code (BSC), and this is costly, since it requires them to meet certain standards, which include financial reserves, and pay a proportion of the general costs of administering and managing the BSC, as well as...
