Triad season is upon us; here's what to expect...

We’re now well into the Triad Season of the year, and the current cold spell is encouraging Triad warnings across the board, from a range of suppliers. So what do consumers need to know about Triad charges, and what exactly do these charges entail?

According to National Grid, Triad charges are defined as:

The Triads are the three half-hour settlement periods with highest system demand and are used by National Grid to determine charges for demand customers with half-hour metering and payments to licence exempt distributed generation. They can occur in any half-hour on any day between November to February inclusive but are separated from each other by at least ten full days. The Triads are determined after the event using Elexon settlement metering data for November to February. This data is usually available around 24 March following which National Grid will confirm the Triad half-hours.

Triads are one of many Third Party Costs, which only come into play during winter peak demand. Triads are unpredictable, as they are based on the UK’s maximum demand over three separate periods, and can only occur three times between November and February 10 days apart. The latter aspect adds even more uncertainty to the mix, as we are unaware of when these will occur. Most major suppliers issue Triad Warnings to their customers, advising that they expect a Triad warning on a particular day, though these are estimates only, based on indicative information such as cold weather, National Grid ‘tight margin’ declarations, tight supply and heavy demand.

The charges incurred by Triads are split between generators and suppliers, and are ultimately passed onto customers. This does not meant that all consumers will see Triad charges on their invoices in March. Only customers on Pass Through contracts will see the real effect of Triads, whereas consumers on Fully Inclusive contracts (and possibly Part Fixed contracts) will not see Triad charges on their bills. Though it should be noted that these costs will be housed under their contracted costs. Ultimately, all high end consumers of electricity will be subject to Triads each winter.

Figures suggest that Triad charges have increased by around 80% over the last five years, and are set to increase a further 40% by the end of the decade.  The charges are based on a tariff that varies for each region of the country, and is dependent on the Distribution Network Operator for any particular meter.

The costs can be detrimental to a company, because they are totally unpredictable. However, to reduce the costs of Triad charges, companies can significantly reduce their consumption, by turning off machines, or lowering production when suppliers and National Grid expect a Triad period. Additionally, National Grid have introduced schemes that remove meters from the grid and onto a temporary replacement ‘battery’ on site, such as SBR and DSBR (Supplemental Balancing Reserve and Demand Side Balancing Reserve respectively), which are great opportunities for companies that are able to Load-Manage. Being able to increase and decrease consumption at the last minute is a great tool to support the national system during peak demand. See link for more details: 

http://www2.nationalgrid.com/UK/Services/Balancing-services/System-security/Contingency-balancing-reserve/Operational-Information/