In the United Kingdom, an electricity supplier is a retailer of electricity. For each supply point the supplier has to pay the various costs of transmission, distribution, meter operation, data collection, tax etc. The supplier then adds in energy costs and the supplier's own charge. Regulation of the charging of customers is covered by the industry regulator Ofgem.
MSP kWh is the amount of electricity consumed at the 'meter supply point', which is the customer's meter. GSP kWh is obtained by multiplying the MSP kWh by the Line Loss Factor (LLF, a figure > 1) to include the amount of electricity lost when it is conducted through the distribution network, from the 'grid supply point' to the customer's meter. Some kWh elements of the bill are charged at MSP and some at GSP. The LLF for a particular supply depends on the distribution network operator (DNO) and the supply's characteristics and the time and date (day of week, season etc.). Some electricity bills may refer to GSP charges as being at a Notional Balancing Point (NBP) - not to be confused with the National Balancing Point (NBP) of the gas network - and may also include losses at transmission level.
The bill
The consumer pays the supplier according to an agreed tariff, or a default rate known as the "standard variable tariff".[1] The tariff may include pass-through costs, which are amounts charged to the energy supplier and then "passed through" directly to the consumer.
Transmission charges, known as "Transmission Network Use of System" (TNUoS), are paid to National Grid to cover the expense of running the grid.[2] The charge is calculated annually using the TRIAD method for large levels of demand, or based on usage between 4pm and 7pm for smaller demand levels.
RCRC
Residual Cashflow Reallocation Cashflow (RCRC), also known as the 'beer fund', is the net remainder of Balancing & Settlement Code (BSC) Trading Charges for a given half-hour, which is payable to (in the case of a surplus) or by (in the case of a deficit) Trading Parties based on their market share of energy volume.[3] These Trading Charges consist of:
Information Imbalance Charges – A charge per MWh on the difference between a BM Unit's Metered Volume and its Expected Metered Volume (based on Final Physical Notification plus Balancing Services Volume). Due to a zero price, this charge is always zero
System Operator BM Cashflow – A cashflow payable to or by the System Operator depending on whether BM Unit Cashflow plus Non-Delivery Charges is positive or negative, and is intended to keep BSCCo cash neutral
Non-Delivery Charges – A charge levied on the Lead Parties of BM Units that fail to satisfy a Bid-Offer Acceptance on the Balancing Mechanism
BM Unit Cashflow – A cashflow payable to or by Lead Parties of BM Units with Bid-Offer Acceptances
Imbalance Charges – A cashflow payable to or by Trading Parties with an Imbalance Volume
As Information Imbalance Charges are always zero, and System Operator BM Cashflow nets with Non-Delivery Charges and BM Unit Cashflow to zero, RCRC is effectively the net of Imbalance Cashflows.
Distribution charges
The distribution charges, known as the "distribution use of system" (DUoS) charges, are paid to suppliers and passed on to the distribution network operator (DNO) on whose network the meter point is located.[4] The charges cover:
Availability
Supply availability, otherwise known as "supply capacity" or "kVA", if represented by its measured units, is the maximum kVA power allowed for a particular supply in a particular network and is set before the supply is energised. It is a figure agreed between the consumer and the supplier (set to a level required by the consumer in almost all cases except where power distribution may be physically limited to the supply) at the start of the contract. This supply availability is charged for every month, in effect as a standing charge, despite the fact that the maximum demand recorded in the month may be lower. If the kVA supply availability figure is exceeded (breached, in effect) by the value of the measured monthly maximum demand, also in kVA for this purpose, the higher figure of kVA from the maximum demand may be charged instead of the supply capacity. The new elevated kVA charge figure (or the supplier's nearest higher capacity band figure, if capacity is only allowed in banded levels 50 kVA apart for instance) may stay as the chargeable figure for twelve months depending on the electricity distribution area. This can cause temporary unnecessary high billing, as if a penalty, if the breach was avoidable. Alternatively, the capacity charge can just return to the original availability figure in the subsequent month's bill. Determining the correct capacity figure to allow for the maximum demand required for the supply can be a fine judgement if the capacity charge is to be kept to a minimum, and vigilance of maximum demand and efforts to keep the power demand lower than the agreed capacity can be required to avoid triggering a higher capacity charge during the contract.
Unit rates
Unit rates are split into 3 time periods: Red, Amber and Green. Costs and periods vary per distribution company. The chart below shows the applicable time bands for each company[5][6].
DNO (with 4-character BSC identifier[s])
Band
Weekday
Weekend
National Grid Electricity Distribution – Midlands (EMEB & MIDE)
Red
16:00 – 19:00
Amber
07:30 – 16:00 & 19:00 – 21:00
Green
00:00 – 07:30 & 21:00 – 24:00
all day
National Grid Electricity Distribution – South Wales (SWAE)
Red
17:00 – 19:30
Amber
07:30 – 17:00 & 19:30 – 22:00
12:00 – 13:00 & 16:00 – 21:00
Green
00:00 – 07:30 & 22:00 – 24:00
00:00 – 12:00 & 13:00 – 16:00 & 21:00 – 24:00
National Grid Electricity Distribution - South West (SWEB)
The Climate Change Levy is a p/kWh tax on certain electricity use. Exempt supplies include domestic supplies and supplies using less than the de minimis threshold of 1,000 kWh / month.[9]
Suppliers meet the Renewables Obligation by submitting a certain number of Renewable Obligation certificates (ROCs) each year to Ofgem, which demonstrates that the certified electricity has come from a renewable source. If a supplier is unable to produce the required number of ROCs, they must pay an equivalent cash amount, the 'cash out price'.[10]
Energy charge
Energy charges are the cost per kWh (kilowatt hour). They are usually given as pence per kWh (p/kWh), an amount often referred to as the unit price or unit rate.[11] The cost of the electricity (without surcharges) is occasionally negative during low consumption and high winds, starting in 2019.[12]
Data collection charge
The data collection charge is a fee paid to the data collector for determining the energy consumption of the supply.
Meter operation charge
The meter operation charge is a fee paid to the meter operator for installing and maintaining the meter.
VAT
VAT is payable at the standard rate unless the supply meets certain conditions (e.g. domestic supplies, or supplies that use less than 1,000 kWh per month) in which case they are charged at the reduced rate of 5%.[13]
Changing supplier
For a non-half-hourly supply, the NHHDC sets the change of supplier (CoS) read from a meter read, a customer read or a deemed read. A deemed read is one estimated by the NHHDC based on any previous or subsequent readings. A CoS read can be disputed up to final reconciliation.[14] Final reconciliation is fourteen months afterwards. If a normal read comes in after final reconciliation that is lower than the CoS read, the new supplier should credit the customer.
↑ "Business Electricity Rates". British Business Energy. Retrieved 2020-01-28. The unit rate is the price you pay for the amount of electricity you use and is given in pence per kWh. This is the bulk of what you pay for electricity.
Companies with headquarters and/or registered office in the UK but no applicable energy operations within the country shown in italics1Ultimate parent company is not UK-based 2Integrated in the United States, no generation or supply activities in the UK
A kilowatt-hour is a non-SI unit of energy equal to 3.6 megajoules (MJ) in SI units, which is the energy delivered by one kilowatt of power for one hour. Kilowatt-hours are a common billing unit for electrical energy supplied by electric utilities. Metric prefixes are used for multiples and submultiples of the basic unit, the watt-hour.
Electricity retailing is the final sale of electricity from generation to the end-use consumer. This is the fourth major step in the electricity delivery process, which also includes generation, transmission and distribution.
An electricity market is a system that enables the exchange of electrical energy, through an electrical grid. Historically, electricity has been primarily sold by companies that operate electric generators, and purchased by consumers or electricity retailers.
Scottish Power Limited, trading as ScottishPower, is a vertically integrated energy company based in Glasgow, Scotland. It is a subsidiary of Spanish utility firm Iberdrola.
Net metering is an electricity billing mechanism that allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. This is particularly important with renewable energy sources like wind and solar, which are non-dispatchable. Monthly net metering allows consumers to use solar power generated during the day at night, or wind from a windy day later in the month. Annual net metering rolls over a net kilowatt-hour (kWh) credit to the following month, allowing solar power that was generated in July to be used in December, or wind power from March in August.
The National Grid is the high-voltage electric power transmission network serving Great Britain, connecting power stations and major substations, and ensuring that electricity generated anywhere on the grid can be used to satisfy demand elsewhere. The network serves the majority of Great Britain and some of the surrounding islands. It does not cover Northern Ireland, which is part of the Irish single electricity market.
An electricity meter, electric meter, electrical meter, energy meter, or kilowatt-hour meter is a device that measures the amount of electric energy consumed by a residence, a business, or an electrically powered device over a time interval.
A Meter Point Administration Number, also known as MPAN, Supply Number or S-Number, is a 21-digit reference used in Great Britain to uniquely identify electricity supply points such as individual domestic residences. The system was introduced in 1998 to aid creation of a competitive environment for the electricity companies, and allows consumers to switch their supplier easily as well as simplifying administration. Although the name suggests that an MPAN refers to a particular meter, an MPAN can have several meters associated with it, or indeed none where it is an unmetered supply. A supply receiving power from the network operator (DNO) has an import MPAN, while generation and microgeneration projects feeding back into the DNO network are given export MPANs.
The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy intensity remains high. There is an ambitious goal to reduce carbon dioxide emissions in future years, but it is unclear whether the programmes in place are sufficient to achieve this objective. Regarding energy self-sufficiency, UK policy does not address this issue, other than to concede historic energy security is currently ceasing to exist.
To balance the supply and demand of electricity on short timescales, the UK National Grid has contracts in place with generators and large energy users to provide temporary extra power, or reduction in demand. These reserve services are needed if a power station fails for example, or if forecast demand differs from actual demand. National Grid has several classes of reserve services, which in descending order of response time are: Balancing Mechanism (BM) Start-Up, Short-Term Operating Reserve, Demand Management and Fast Reserve.
The availability and uptake of green electricity in the United Kingdom has increased in the 21st century. There are a number of suppliers offering green electricity in the United Kingdom. In theory these types of tariffs help to lower carbon dioxide emissions by increasing consumer demand for green electricity and encouraging more renewable energy plant to be built. Since Ofgem's 2014 regulations there are now set criteria defining what can be classified as a green source product. As well as holding sufficient guarantee of origin certificates to cover the electricity sold to consumers, suppliers are also required to show additionality by contributing to wider environmental and low carbon funds.
Load management, also known as demand-side management (DSM), is the process of balancing the supply of electricity on the network with the electrical load by adjusting or controlling the load rather than the power station output. This can be achieved by direct intervention of the utility in real time, by the use of frequency sensitive relays triggering the circuit breakers, by time clocks, or by using special tariffs to influence consumer behavior. Load management allows utilities to reduce demand for electricity during peak usage times, which can, in turn, reduce costs by eliminating the need for peaking power plants. In addition, some peaking power plants can take more than an hour to bring on-line which makes load management even more critical should a plant go off-line unexpectedly for example. Load management can also help reduce harmful emissions, since peaking plants or backup generators are often dirtier and less efficient than base load power plants. New load-management technologies are constantly under development — both by private industry and public entities.
El Salvador's energy sector is largerly focused on renewables. El Salvador is the largest producer of geothermal energy in Central America. Except for hydroelectric generation, which is almost totally owned and operated by the public company CEL, the rest of the generation capacity is in private hands. With demand expected to grow at a rate of 5% in the coming years, the Government's 2007 National Energy Strategy identified several hydroelectric and geothermal projects as the best option to meet demand in the future and to diversify the country's energy mix.
A meter operator in the UK energy industry is an organization responsible for installing and maintaining electricity and gas meters. Since 1998 there has been full competition for meter operators, allowing the meter operator for a particular supply to be contracted with the energy supplier by either the supplier's discretion or at the customer's direction. Consumption data from the installed metering is then collected by the appointed data collector to be submitted for billing.
In the UK electricity system, a data collector (DC) is responsible for determining the amount of electricity supplied so that the customer can be correctly billed.
Differential tariff is an example of demand side management where the price per unit of energy varies with the consumption. If a power utility uses differential tariff, it may change the rate per kWH of energy used during different times, such as raising the price during times of high energy consumption and lowering the price during times of low energy consumption. This helps balance the rate at which power is used and the rate at which power is created.
OVO Energy is a major energy supplier based in Bristol, England.
The National Grid covers most of mainland Great Britain and several of the surrounding islands, and there are interconnectors to Northern Ireland and to other European countries. Power is supplied to consumers at 230 volts AC with a frequency of 50 Hz. In 2023 about a third of electricity used in Britain was generated from fossil gas and two-thirds was low-carbon power. Wind generates the most low-carbon power, followed by nuclear some of which is imported from France. The government is aiming for greenhouse gas emissions from electricity in Britain to be net zero by 2035.
A feed-in tariff (FIT) is paid by energy suppliers in the United Kingdom if a property or organisation generates their own electricity using technology such as solar panels or wind turbines and feeds any surplus back to the grid. The FIT scheme was imposed on suppliers by the UK government, and applied to installations completed between July 2009 and March 2019.
The Commission for Regulation of Utilities, formerly known as the Commission for Energy Regulation, is Ireland's energy and water economic utility regulator.
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