What’s the Capacity Market got to do with me?

The decidedly autumnal weather we had recently is a taste of what’s to come, dark nights, cold and wet. By the time we get used to it, you’ll also be seeing another line on your bill. This new charge is called the Capacity Market Levy.

What does Capacity Market Levy mean?

The Capacity Market Levy is aimed at securing capacity from sources smaller than standard power generation. These sources may otherwise be considered inefficient due to economies of scale. It’s going to affect Half-Hourly metered consumers who operate through the peak period. They will potentially pay not only Triad and Red Band DuOS charges, but also the new levy which is equivalent to £31/MWh for this winter. With other changes to come and significant changes to tariffs, the hours between 4 and 7pm could be very expensive to run processes. It’s something that is likely to get worse with the levy forecast to rise to £100/MWh in the next few years.

Mitigation, or opportunity?

Managing consumption and maximum demand is never a bad idea. Doing so during the red period is always a tactical change worth making. Strategically, shifting processes away from that period altogether could well be the move that makes the difference between you and your competitors.

Take it a step further. Get involved in a Capacity Agreement, either on your own or collectively, through an aggregator. Turn down your demand when asked, and get paid not only for that, but also for being on standby.

It pays to plan ahead

Unfortunately, it’s too late to get involved for this winter as auctions took place in the spring of 2017. The Prequalification for next year closes this week, so again, it’s going to be difficult to take things forward. It will take time to get a technical solution in place. These are strategic decisions needing high level involvement, it’s vital to get ahead of the game.

Can we help?

The difficulty for many is that production and process are over-arching requirements. Energy Managers and Accountants may know the new levies are coming. Unless they can source a technical solution, there is little they can do. There is no point in applying to be part of the auction process unless you know you can turn-down, generate and how to do it. This is where our capabilities come to the fore. Efficient Power Solutions can take you through the whole process, from early discussions, to site survey, to solution provision and post-installation support. Even if you can’t benefit directly from the next auction, having the solutions in place will mitigate some of the bottom line impact and will put you ahead for the next round. Let us help you with those decisions.

For unbiased advice on these topics, contact Dave or Kevin at Efficient Power Solutions on 01909 569016.

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