I don't like DCP 228

by Franck Latrémolière

This article was published in data bulletins in January 2017 and might not reflect the current position. E&OE.

What is DCP 228?

DCP 228 is a modification to DNOs' use of system charging methodologies which Ofgem directed to be implemented for charges from 1 April 2018.

DCP 228 increases green unit rates to unconscionable levels

Without DCP 228, charges for off-peak consumption were not subject to a large amount of revenue matching, on the basis that off-peak consumption does not drive any need for network capacity to be provided or maintained. Off-peak consumption just uses capacity that would otherwise be wasted, so it costs next to nothing.

With DCP 228, a lot of costs are applied to active power charges at all times, even when there is likely to be spare network capacity.

In this respect, DCP 228 makes the charges less reflective of network costs, however costs are defined or measured.

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DCP 228 increases unfairness between CDCM and EDCM

Similar customers pay a lot more in use of system charges if they are subject to the CDCM than if they are subject to the EDCM. DCP 228 almost certainly makes this discrepancy worse, but because the DNOs choose not to publish information about their EDCM calculations, even though they could publish useful aggregates without disclosing customer-specific data, I have not found a way of illustrating this point yet.

DCP 228 cuts reactive power charges

Without DCP 228, reactive power charges were subject to revenue matching on a comparable basis as active power charges, on the basis that both reactive power and active power use up network capacity.

With DCP 228, a lot of costs are applied to active power charges through revenue matching with no counterpart on reactive power charges.

I am not completely sure whether the drop in reactive power charges is a bad thing. (If you are a capacitor manufacturer, this is a bad thing.)

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Franck Latrémolière, January 2017

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