We welcome the government's energy plan announcement on 8/09/22 - click here for our response.

Third party and industry charges

Energy invoices are made up of a combination of the commodity cost (the fuel you consume) and non-commodity costs. Included in the non-commodity costs are government-originated charges and third party charges. Some of these charges are levied on suppliers who pass them onto the customer.

Your contract and invoice

Your contract may have these charges included in your overall agreed price; if so they won’t be shown on your invoice. Or you may have these items separated out, in which case they will be shown as separate line items on your invoice.

Examples of government originated charges are the Feed-in Tariff (FIT) and Electricity Market Reform (EMR) charges such as Contracts for Difference (CfD) and Capacity Mechanism (CM). Examples of third party charges include Distribution Use of System (DUoS), Balancing Services Use of System (BSUoS) and Transmission Network Use of System (TNUoS).

Latest updates

May 2022

Due to delayed generator payments received by the Low Carbon Contracts Company (LCCC) for Contracts for Difference (CfD), reconciliation for January to March 2022 consumption will be undertaken as part of July 2022 invoicing activity.

February 2022

Due to CMP381 BSUoS cap of £20/MWh introduced as of 17/01/2022 to defer exceptionally high Winter 2021/22 BSUoS costs to 2022/2023, there will be a cap introduced to BSUoS reconciliations for Jan22 to Mar22 consumption. Please refer to National Grid website for further information on CMP381 or for access to SF data.

January 2022

Due to an EMR Settlement issue with the Contracts for Difference (CfD) Green Excluded Electricity (GEE) volume reconciliation for January to March 2021 consumption, the Low Carbon Contracts Company (LCCC) volume data is under review and will not be available in time for us to reconcile through the January invoicing cycle as planned. As such, we will now undertake the GEE volume reconciliation as part of April 2022 invoicing activity.

Furthermore, there has been an issue raised with LCCC rates for CfD quarterly reconciliation for October to December 2021 consumption. We continue to await information from LCCC, but now expect to undertake initial reconciliations in April 2022.

December 2021

As per previous commentary, customers with Balancing Services Use of System (BSUoS) pass-through agreements will be reconciled for both September and October actuals through December’s invoicing run. Additionally, customers who take Contracts for Difference (CfD) pass-through will be reconciled the initial CfD quarterly reconciliation for 1 July 2021 to 30 September 2021 consumption. The Green Excluded Electricity (GEE) volume reconciliation will also take place for the period 1 October 2020 to 31 December 2020.

November 2021

Due to an EMR Settlement issue with the Contracts for Difference (CfD) quarterly reconciliation in October, the Low Carbon Contracts Company (LCCC) did not publish initial cost and volume data in time for us to reconcile through the November invoicing cycle as planned (for July to September 2021 consumption). As such, we will now undertake the quarterly reconciliation as part of December’s invoicing activity.

Furthermore, there has been an additional Balancing Services Use of System (BSUoS) settlement issue this month which has led to the delay of the initial reconciliation for September consumption. We continue to await information from National Grid ESO, but now expect to undertake initial reconciliations for both September and October consumption in December.

Explanation of invoice charge terminology and function
Charge Who it's paid to What it's for
Balancing Services Use of System (BSUoS) National Grid Charge for keeping the network in balance
Climate Change Levy (CCL) HM Revenue & Customs (HMRC) A tax on energy aimed at increasing energy efficiency and reducing carbon emissions
Contracts for Difference (CfD) HMRC Support scheme for low carbon generators which provides long-term price certainty to increase investment
Distribution Use of System (DUoS) Distribution Network Operator (DNO) Charge for distributing electricity across the distribution network to the customer supply point
Feed-in Tariff (FIT) Ofgem Levied on suppliers to fund the FIT scheme designed to incentivise new renewable generation
Flexible purchasing Supplier Charges/credits for flexible purchasing - not applicable for fixed contracts
Renewable Obligation (RO) Ofgem Levied on suppliers to fund the RO scheme
Settlement and agency charges Data Collector (DC), Data Aggregator (DA) and Meter Operator (MOP) Charges for DC (retrieving meter reads or consumption data), DA (for industry settlements purposes) and MOPs (maintaining the meter)
Transmission Network Use of System (TNUoS) National Grid Charge for using and maintaining the transmission network

 

Capacity Mechanism (CM)

What is Capacity Mechanism (CM)?

CM is an Electricity Market Reform (EMR) mechanism to help the UK meet its carbon reduction targets and ensure security of electricity supply. It is designed to make sure there is sufficient power available to meet future needs. It operates as an annual auction, which started in December 2014, to procure the majority of the UK’s required energy capacity four years in advance. There is a top-up auction one year ahead of delivery to enable Demand Side Response (DSR) to participate. The cost of running the CM is passed through to consumers.

How CM is charged

For both Half-Hourly (HH) and NonHalf Hourly (NHH) the cost will either be fully passed through (with subsequent reconciliation) or fixed into unit charges
CM is made up of two elements, Obligation Costs and an Operational Cost Levy:

Obligation Costs

  • Obligation Costs reflect the costs of the capacity auctions and are charged on consumption during the winter peak period; from 16:00 and 19:00 on working days between November & February. In order to estimate CM charges, an Estimated Annual Consumption Volume (EACV) will be calculated in kWh. This is the expected volume at National Balancing Point (NBP) for the Meter Point Administration Number (MPAN) across the winter peak period.
  • Obligation Costs will initially be charged using a forecast price and the EACV, and applied to each invoice period throughout the year. In order to do this the EACV is divided by the number of days in the year, then multiplied by the number of days in the invoice period. The resultant volume is multiplied by the forecast Obligation Levy price.
  • Obligation Levy costs will then reconciled for pass through contracts using actual consumption and price once known.

Operational Costs

  • Operational Costs Levy reflects the running cost of the scheme and are set by the Electricity Settlement Company (ESC). This is a fixed unit rate per kWh for each 12-month period.

CM rates:

  Capacity Mechanism Peak Rate (p/kWh) Operational Rate (p/kWh)
Delivery month Initial Billing Rate1 Reconcilliation2 Revised Reconcilliation3 Initial Billing Rate1 Reconcilliation2

January 2021

11.779

10.897

Not expected

0.003

0.003

February 2021

11.779

10.897

Not expected

0.003

0.003

March 2021

11.779

10.897

Not expected

0.003

0.003

April 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

May 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

June 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

July 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

August 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

September 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

October 2021

5.543

5.287

Not expected

0.003

tbc Oct-22

November 2021

5.366

5.287

Not expected

0.003

tbc Oct-22

December 2021

5.366

5.287

Not expected

0.003

tbc Oct-22

January 2022

5.366

5.287

Not expected

0.003

tbc Oct-22

February 2022

5.366

5.287

Not expected

0.003

tbc Oct-22

March 2022

5.313

5.287

Not expected

0.003

tbc Oct-22

April 2022

6.881

tbc Jun-23

Not expected

0.003

tbc Oct-23

May 2022

6.881

tbc Jun-23

Not expected

0.003

tbc Oct-23

June 2022

6.881

tbc Jun-23

Not expected

0.003

tbc Oct-23

July 2022

6.956

tbc Jun-23

Not expected

0.003

tbc Oct-23

August 2022

6.956

tbc Jun-23

Not expected

0.003

tbc Oct-23

1. Initial billing rate based on internal forecast of cost
2. Reconciliation based on actual volumes and charges
3. Potential reconciliation reserved for extreme industry event such as settlement errors/data issues.

Find out more:

Contracts for Difference (CfD)

What is Contracts for Difference (CfD)?

CFD is an Electricity Market Reform (EMR) mechanism to help the UK meet its carbon reduction targets and ensure security of electricity supply.

The CfD charge is designed to support investment in new low-carbon generation, with a technology-dependent fixed price known as the 'strike price' (wholesale price + top-up subsidy). CfD costs will vary annually due to wholesale price fluctuations and amount of CfD generation produced in each year. Costs are met by a levy applied to energy suppliers, which are then passed on to consumers.

How CfD is charged

For both Half-Hourly (HH) and Non Half-Hourly (NHH) the cost will either be fully passed through (with subsequent reconciliation) or fixed into unit charges

CfD is made up of two elements, Supplier Obligation Cost and Operational Cost Levy. These are combined into one price calculated against the National Balancing Point (NBP) consumption for each individual MPAN The Supplier Obligation Cost reflects the amount of low-carbon electricity funded by the scheme. It reflects the subsidy paid to each CfD generator based on volume of energy generated and prevailing wholesale electricity costs.

The Operational Costs Levy reflects the running costs of the scheme set by the Local Carbon Contracts Company (LCCC).

A forecast rate will be applied to each invoice period for pass through contracts and reconciled once actual prices are known in accordance with the Settlement Calendar.

Green Excluded Energy (GEE)

GEE is a supplier level exemption that is not known until at least 6 months after the end of the quarter. This results in a further reconciliation being calculated and confirmed for each quarter. An estimate of GEE volume is included in the initial CFD forecast rate and, as of October 2021, will be applied to the quarterly reconciliation numbers provided by Low Carbon Contract Company (LCCC).

CfD charges (£/MWh) including Operational Rate:

  CfD charges (p/kWh) including Operational Rate
Delivery month Initial Billing Rate 1. Quarterly Reconciliation 2. GEE Volume Reconciliation 3. BEIS Loan Amount 4.

January 2021

0.937

0.748

0.778

0.000

February 2021

0.918

0.748

0.778

0.000

March 2021

0.814

0.748

0.778

0.000

April 2021

1.053

0.724

0.763

0.000

May 2021

1.121

0.724

0.763

0.116

June 2021

0.803

0.724 

0.763

0.116

July 2021

0.737

0.319

Not expected

Not expected

August 2021

0.625

0.319

Not expected

Not expected

September 2021

0.430

0.319

Not expected

Not expected

October 2021

0.387

-0.172

Not expected

Not expected

November 2021

-0.661

-0.172

Not expected

Not expected

December 2021

-0.348

-0.172

Not expected

Not expected

January 2022

-0.518

tbc Jul-22

Not expected

Not expected

February 2022

0.000

tbc Jul-22

Not expected

Not expected

March 2022

0.000

tbc Jul-22

Not expected

Not expected

April 2022

0.000

tbc Jul-22

Not expected

Not expected

May 2022

0.000

tbc Jul-22

Not expected

Not expected

June 2022

0.000

tbc Jul-22

Not expected

Not expected

July 2022

0.000

tbc Jul-22

Not expected

Not expected

August 2022

0.000

tbc Jul-22

Not expected

Not expected

1. Initial billing rate based on internal forecast of cost
2. Reconciliation based on actual daily volumes and charges per quarterly outturn data provided by LCCC. As of Oct-21 this will also include a forecast of GEE volume. Numbers shown represent a quarterly average and will vary to billed amounts; however, daily values for the latest quarter are provided below.
3. GEE volume reconciliation. Daily values are provided below. Includes BEIS loan amount.
4. BEIS Loan Amount. Split out for visbility - included in 3. GEE reconciliation volume.
* Please note, £1.16/MWh (0.116 p/kWh) of the reconciliation results from last year's BEIS loan recovery for the Apr-20 to Jun-20 quarter

Quarterly reconciliation

Please refer to these workbooks for the individual daily rates: Daily CfD rates (Quarterly reconciliation) for October 21 to December 21

GEE Volume reconciliation

Please refer to these workbooks for individual daily rates: Daily CfD rates (GEE Volume reconciliation) for January 21 to March 21
Please refer to these workbooks for individual daily rates: Daily CfD rates (GEE Volume reconciliation + BEIS Loan) for April 21 to June 21

Find out more about CfD:

Renewables Obligation (RO)

What is the Renewables Obligation (RO)?

The Renewables Obligation (RO) is a UK government scheme to support the development of large-scale renewable energy generation, in order to help meet the UK’s climate change objectives. It was introduced in 2002 but closed to all new generation contracts at the end of March 2017, and was replaced by the Contracts for Difference (CfD) scheme. Existing RO contracts will continue to run until 2027. The RO is funded by suppliers, with costs then recouped from consumers.

How RO is charged

RO can either be charged as a pass-through cost which will appear as a separate line item on invoices, or consolidated in the overall unit rate customers pay. Both these options are available to Half-Hourly (HH) and Non-Half Hourly (NHH) customers.

Forecast RO rates for pass through contracts are based on the published Buy Out Price and Obligation Level. npower Business Solutions (nBS) reserves the right to re-forecast pass-through levels in line with any RO shortfall/expected mutualisation impacts and will reconcile to actual costs once known.

RO pass-through rates:

  Renewable Obligation (p/kWh)
Delivery Month Initial billing rate1 Mutualisation Reconcilliation2 Further Mutualisation Reconcilliation3

January 2021

2.357

tbc

Not expected

February 2021

2.357

tbc

Not expected

March 2021

2.357

tbc

Not expected

April 2021

2.499

tbc

Not expected

May 2021

2.499

tbc

Not expected

June 2021

2.499

tbc

Not expected

July 2021

2.499

tbc

Not expected

August 2021

2.499

tbc

Not expected

September 2021

2.499

tbc

Not expected

October 2021

2.499

tbc

Not expected

November 2021

2.499

tbc

Not expected

December 2021

2.499

tbc

Not expected

January 2022

2.499

tbc

Not expected

February 2022

2.499

tbc

Not expected

March 2022

2.499

tbc

Not expected

April 2022

2.596

tbc

Not expected

May 2022

2.596

tbc

Not expected

June 2022

2.596

tbc

Not expected

July 2022

2.596

tbc

Not expected

August 2022

2.596

tbc

Not expected

1. Initial billing rate calculated using supplier obligation levels and buy out price
2. RO mutualisation reconciliation (triggered by shortfall of payments that exceed the mutualisation threshold)
3. Potential reconciliation based on shortfall of mutualisation payments

Find out more about RO:

Feed-in Tariff (FIT)

What is the Feed-in Tariff (FIT)?

Feed in Tariff is a government scheme designed to support small-scale renewable generation in businesses and homes. It was launched in 2010 and offers an index-linked payment for every kWh of energy produced for a 10-25 year period, with different rates for different technologies. It is funded by suppliers based on market share, with costs then recouped from consumers. The scheme closed to new entrants from 1 April 2019.

How FIT is charged

FIT can either be charged as a pass-through cost which will appear as a separate line item on invoices, or consolidated in the overall unit rate customers pay. Both these options are available to Half-Hourly (HH) and Non-Half Hourly (NHH) customers.

Costs for pass through contracts are not known up front so are initially estimated for each FIT year (1 April to 31 March). There will be a reconciliation performed during the October to December quarter after a FIT year has ended and the actual costs are known.

FIT pass-through rates:

  Feed In Tariff (p/kWh)
Revised reconciliation Initial Billing Rate1 Reconcilliation2 Revised Reconcilliation3

January 2021

0.721

0.698

Not expected

February 2021

0.721

0.698

Not expected

March 2021

0.721

0.698

Not expected

April 2021

0.670

tbc Nov-22

Not expected

May 2021

0.672

tbc Nov-22

Not expected

June 2021

0.672

tbc Nov-22

Not expected

July 2021

0.672

tbc Nov-22

Not expected

August 2021

0.672

tbc Nov-22

Not expected

September 2021

0.672

tbc Nov-22

Not expected

October 2021

0.645

tbc Nov-22

Not expected

November 2021

0.645

tbc Nov-22

Not expected

December 2021

0.645

tbc Nov-22

Not expected

January 2022

0.645

tbc Nov-22

Not expected

February 2022

0.645

tbc Nov-22

Not expected

March 2022

0.624

tbc Nov-22

Not expected

April 2022

0.691

tbc Nov-22

Not expected

May 2022

0.691

tbc Nov-22

Not expected

June 2022

0.694

tbc Nov-22

Not expected

July 2022

0.694

tbc Nov-22

Not expected

August 2022

0.694

tbc Nov-22

Not expected

 

1. Initial billing rate based on internal forecast of cost
2. Reconciliation based on annual FiT levelisation
3. Potential reconciliation reserved for extreme industry event such as settlement errors/data issues/mutualisation.

Find out more about FiT:

Climate Change Levy (CCL)

 

What is the Climate Change Levy (CCL)?

CCL is a tax on the use of certain fuel and power, including gas and electricity, by non-domestic users in the UK.

It was introduced to incentivise businesses to reduce their energy consumption and to become more energy efficient, thereby reducing carbon emissions.

As your energy supplier, we collect this levy via your invoice on behalf of HMRC.

How CCL is charged

CCL is charged on the kWh of gas and electricity shown on your invoice. There are separate CCL rates which apply for gas and electricity.

The rates of CCL are usually increased annually at the start of the tax period from the 1st April.

CCL is not chargeable on:

  • Supplies for domestic use.
  • Supplies to charities in relation to their non-business activities.
  • Supplies to business customers who use very small quantities of energy.

Some supplies qualify for a reduced rate of CCL. Where that is the case, the customer must submit a PP11 Supplier Certificate to us in order for the relief to be applied to the account.

Further information on CCL, including the details of the exclusions and the reliefs, is available on the HMRC website.

CCL rates

  1 April 2019 to 31 March 2020 1 April 2020 to 31 March 2021 1 April 2021 to 31 March 2022 1 April 2022 to 31
March 2023
Electricity CCL rates

0.847 p/kWh (£8.47/MWh)

0.811 p/kWh (£8.11/MWh)

0.775 p/kWh (£7.75/MWh)

0.775 p/kWh
(£7.75/MWh)

Gas CCL rates

0.339 p/kWh (£3.39/MWh)

0.406 p/kWh (£4.06/MWh)

0.465 p/kWh (£4.65/MWh)

0.568 p/kWh
(£5.68/MWh)

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For existing customer service please call:

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We're open:
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Excluding public holidays.

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Contact us

For a new quote or a renewal please call:

Show Phone Number 0330 912 8884

For existing customer service please call:

Show Phone Number 0800 138 2322

We're open:
Monday-Friday 9am-5pm.
Excluding public holidays.

Request a call back

Request a call back

Contact us

For a new quote or a renewal please call:

Show Phone Number 0330 053 2934

For existing customer service please call:

Show Phone Number 0800 138 2322

We’re open:
Monday-Friday 9am-5pm.
Excluding public holidays.

Request a call back

Request a call back

Contact us

To discuss a quote or a renewal for one of your clients please call:

Show Phone Number 0330 175 9574

For existing customer service please call:

Show Phone Number 0800 138 2322

We’re open:
Monday-Friday 9am-5pm.
Excluding public holidays.

Request a call back

Request a call back