Business Energy: Third-party costs at all-time high

Renewable energy company Drax has just published its Spring 2023 Third-Party Costs Guide to support businesses in their energy cost forecasting for this year.

The report shows that third-party costs (TPCs), which currently make up around 40% of a business’ total energy bill, are at their highest ever point. Underlying costs like Renewables Obligation (RO), Balancing Services Use of Systems (BSUoS) and Distribution Use of Systems (DUoS) are also all likely to rise this year.

The guide deep dives into the current climate, regulatory landscape for TPCs, and forecasts the future of 2023 business costs.

Following the publication of the report, Paul Miller, Sales Director at renewable energy company Drax, says:

“Soaring wholesale prices aren’t the only thing pushing energy bills up. Third Party Costs (TPCs) – which typically make up 60% of a business’ total energy charges but are currently sitting at around 40% – are at their highest ever point. Despite the 20% decrease, their impact on a business’ overall energy costs is still substantial, which means the slightest change will have a big impact. 

Just like wholesale energy prices, TPCs are sensitive to what’s happening in the market and can rise and fall considerably each year. Our Spring 2023 Third Party Cost Guide found that many of the underlying charges such as Renewables Obligation (RO), Balancing Services Use of Systems (BSUoS) and Distribution Use of Systems (DUoS) are all going to rise this year, largely due to inflation and increased volatility within the market.

 We’re working closely with our customers to help them understand these changes and minimise their costs going into 2023.”