Maximum Demand Meters Explained
To match electricity supply with demand on a national scale, it involves considerable challenges. A whole range of systems must be put in place to accurately and effectively ensure this is carried out on a continuing basis.
Maximum demand charges are just one of the tools that DNOs (distribution network operators) make use of for large business electricity customers.
What is a maximum demand meter?
All maximum demand customers have been transitioned over to half hourly meters since April 2017. This will help to build a smarter electricity network within the UK that enables the balancing of power supply and demand in a far more efficient manner.
A change in the Balancing and Settlement Code, known as P272, meant that the switch to half hourly meters was applied. With half hourly settlements in place, a large number of businesses will not see a difference in their bills, others will pay a reduced amount. Nonetheless, some firms will be required to pay extra. Anyone with a current transformer (CT) meter may be expected to pay an increased amount for their commercial electricity. This is due to the DNO applying charges for the reserved network capacity.
Meters record usage data every 30 minutes for half hourly sites, instead of waiting for a meter reading to be taken. What this means is that providers can now charge based on actual usage rather than estimations, which in the past have been known to be unreliable.
How does a maximum demand meter work?
How can I reduce my costs as a maximum demand customer?
It will be a top priority for any business to find ways to reduce their costs, especially business energy expenditure. To start with, ensure your MIC charges reflect your peak power demand.
As a maximum demand customer, your business electricity bill will include a whole range of charges such as the unit charge per kWh and a capacity charge. Having a high MIC may mean that your bills are more expensive than they need to be.
Should this be the case, get in touch with your DNO to look into this for you. Beforehand, remember to carry out a review of your maximum demand in order to establish whether the MIC charge is too high. It’s also highly recommended that you carry out a business energy audit too, this can help you improve energy efficiency which will in turn equate to lower payments towards your bills.
Aside from fully understanding maximum demand meter charges, and taking the necessary steps to decrease them, you can also lower your overall costs by switching to a new supplier. With a range of options available to you, it is fairly easy to find a competitive deal through Utility Saving Expert’s online business energy comparison tools.
Furthermore, a time of use tariff may be a suitable option for your business. This plan allows you to pay less for using electricity outside of peak hours. Depending on your business’ energy requirements and operating hours, a time of use tariff could potentially save you an enormous amount of money and is definitely worth looking into. Find out more about business energy tariffs in our useful guide where we explain the benefits and drawbacks of each option, as well as what you must avoid.
To conclude, a maximum demand charge is used by a DNO and describes the peak power demand of any business from the National Grid during a 30-minute period.
A maximum demand meter works just like any other energy meter – both record your electricity consumption. However, a maximum demand meter will send back readings to the energy supplier every 30 minutes. The data is then analysed and stored; the maximum demand calculation does not actually take place within the meter itself.