Which energy changes just kicked in?


April sees a number of changes to energy regulation come into force.

Firstly, minimum energy efficiency standards, or MEES regulations, now mean public and private sector landlords cannot grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G.

Landlords can self-certify for exemption, but it requires some effort (details here). Otherwise there are penalties of up to £160,000 per property.

Secondly, a tranche of new charging arrangements came into force on 1 April which will have an impact on business energy bills.

DCP161 and DCP228 affect distribution network charges, which make up 10-15% of the average power bill.

DCP161 affects network capacity. Businesses have a set capacity, agreed with their distribution network operator, around the maximum demand they can import. Previously, if they breached that capacity, they just paid the standard rate for any excess. But from now on, breaching the agreed capacity limit incurs a penalty charge up to three times the standard rate.

DCP228 affects time of use tariffs – red, amber and green, or RAG, rates. Red rates had typically been many times higher than green rates, leading companies to adopt red band avoidance strategies. But from now on, the RAG rates are flattened, so that the difference between red and green rates is much less. While some half-hourly metered companies using power during peak times may see smaller bills as a result, others face higher charges as avoidance measures become nullified. For example, firms operating overnight will now pay more. 

Meanwhile, the P350 Balancing and Settlement Code (BSC) modification changes the way businesses are charged for power transmission losses. According to consultancy Inprova Energy, that could increase electricity bills for London business consumers by around 1.5%. Business energy consumers in the North and Scotland, however, are likely to pay less.

Related articles:

What will hit energy bills in 2018?

One in ten commercial buildings drops into danger zone as MEES looms

Government publishes guidance for landlords on minimum energy efficiency laws

Lawyers outline how landlords can avoid falling foul of minimum energy efficiency standards

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