The changes

From 1 April 2017, large commercial energy customers' electricity consumption will be metered every 30 minutes as a result of modifications to the Balancing and Settlement Code. Modification P272 was approved by Ofgem on 29 October 2014 and, through an electricity supply licence obligation, requires all licenced suppliers to collect and use half-hourly (HH) electricity consumption data. Suppliers have been required since 6 April 2014 under the terms of their supply licences to supply customers in Profile Classes 5-8 (Large Commercial Customers) through advanced meters which are capable of monitoring HH consumption data. Modification P272 will allow suppliers to monitor HH data in order to more accurately assess the settlement of electricity costs for their customers, rather than using estimated data based on annual meter readings. This will allow customers to benefit from developments such as time-of-use tariffs and providing demand side response (DSR) services.

The Opportunities 

The changes will only apply to Large Commercial Customers, which have the highest levels of electricity demand (to find out what your Profile Class is, see page 2 of Ofgem's factsheet here). Over 100,000 businesses in the UK fall within this category. Since 5 November 2015, commercial customers who have switched electricity suppliers will have been subject to HH metering but from 1 April 2017, all Large Commercial Customers will be switched to HH metering. This is in line with Ofgem's intention that all customers should be able to take advantage of HH metering.

As the name suggests, HH metering will allow Large Commercial Customers to settle their meter on a half hourly basis. This shift in metering process allows these customers to keep a closer watch on how much electricity they are using, and when they are using it. By monitoring electricity use more carefully, customers may be able to shift their demand patterns to take advantage of lower energy prices outside of peak times. This can be achieved through turning off demand at certain times of day or even switching working hours (if possible and commercially viable). This will be particularly attractive during the upcoming winter TRIAD season, in which the three highest peak electricity prices will be reached and charged for. As the TRIAD will not be confirmed until spring, large users of electricity are particularly vulnerable to a spike in electricity costs during these times. Further, this spike has been increasing each year, as the energy systems in the UK evolve to keep up with the new energy mix.

Additionally, commercial customers could take part in demand side response (DSR) whereby incentives are offered to electricity consumers to reduce or shut down their electricity consumption at times of peak demand. DSR is designed to reduce excessive peaks in demand at certain times of the day or year in order to protect the electricity network against instances of demand outstripping supply - risking blackouts – and causing inflated electricity prices as a result. Due to their greater demand for electricity, Large Commercial Customers are well-placed to take advantage of DSR and other incentives offered for reductions in demand at peak times.

Next Steps

The changes do not require a new meter to be installed as they only apply to those Large Commercial Customers, who should already have an advanced meter installed. However, each commercial premises covered by the modifications will need to have appointed for it a Meter Operator, Data Collector and Data Aggregator (Supplier Agents). A Large Commercial Customer can appoint their own Supplier Agents but if they choose not to, their electricity supplier will appoint the Supplier Agents for the premises. This is another area in which a Large Commercial Customer could potentially make savings if they are inclined to seek out the best deals.