Yet another third party charge that is due to make an appearance on your bills!
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This relates to the costs of electricity generation, specifically linked to the cost of restarting power stations which unfortunately the industry has underestimated in recent months. This cost is usually included within any contract however, National Grid will pass on additional charges for unanticipated costings to electricity suppliers and unfortunately these will in turn be passed on to the end users. We have provided some further detail below, however please be assured that we have investigated the legislation that enforces these charges for you and we have no cause for dispute.
As always each supplier responds, recovers and treats these charges in different ways, however it takes time for them to decide what they are going to do once they have the bill from National Grid and know the damage as it were.
What is Black Start ?
If there was a major black out across the transmission network, National Grid uses the Black Start service to get everything up and running again. Black Start works by making sure power stations across the Uk are able to kick start their generators into producing energy for the grid as quickly as possible.
What are the associated costs ?
Each year, Ofgem agree annual targets with National Grid to provide this service within an agreed budget. For April 2016 to March 2017, this target was at first set by Ofgem at £22.35million but was later increased by 55% to £34.74million. National Grid has since reported that they have exceed their annual target by a further £82.49million which they’re passing through to all energy suppliers.
How has the rate been calculated ?
Using the National Grid’s £82.49million overspend and a total relevant industry demand of 520TWh; the additional Black Start costs can be calculated approximately as 0.016 p/kwh.
Who is going to be affected ?
Half Hourly customers who are on fixed price contracts agreed before 23rd September 2017 when National Grid communicated their intention to recover cost in excess of their target. Additional costs will therefore apply to consumption between April 2016 and March 2017.
We do appreciate that retrospective supplier pass-through charges and new government levies continue to bypass ‘fixed’ contract agreements so we are monitoring this on your behalf and ensuring the contracts we recommend continue to be as inclusive as possible.