Triad Periods are used to determine the annual charge of electricity transmission, dictating the cost of your energy supply. Using energy during these periods can significantly increase your annual energy bill but there are ways this impact can be minimised.
What are Triads, and when do they occur?
Triads represent the three highest half-hour periods for electricity demand between the months of November and February, that are over ten days apart. Based on these three periods, the National Grid is able to calculate the annual charge of power transmission in the UK.
This charge is then passed onto the supplier and in addition to other non-commodity costs, this will help determine the price of your energy supply.
Read more about non-commodity costs here.
If your organisation consumes a lot of energy during these three periods then the price of your supply will be increased accordingly. However, adopting sensible energy management during the winter months can help protect your business against an avoidable price increase.
Due to the unpredictable nature of energy demand, the National Grid are unable to forecast Triad periods, although they are able to provide alerts when the margin between available supply and expected demand is tight. Suppliers will usually re-issue these alerts, providing customers with the opportunity to adjust their consumption.
On average, there are around 20-30 Triad alerts during November and February, with most of these warnings coinciding with periods of cold weather. Alerts are typically issued in late afternoon/ early evening when domestic consumption is at its highest.
In order to avoid Triad periods occurring within the same day, Triad periods will always be at least ten days apart. These periods will then be determined in March and the transmission costs calculated thereafter.
The overall aim of Triads is to provide businesses with an incentive to reduce their energy consumption during periods of high demand.
How are businesses affected by Triads?
Although the cost of transmission impacts all consumers, the extent of the impact can differ, with some businesses affected more directly than others, usually depending on the supplier contract.
Half Hourly Meters – Businesses which operate with a half hourly, settled meter will have their transmission costs calculated based on real-time consumption. Therefore, reducing consumption during Triad periods would lead to a reduction in the cost of their supply.
Non-Half Hourly Meters – Non-Half hourly customers will have their transmission/ supply costs calculated using an average based on expected consumption.
Fixed Contracts – The contract type is also important in regard to the effect of managing your energy during these periods. A fixed contract means the supplier can not alter the price for the duration of the contract, instead, these changes will be applied when it is time to renew.
At this time, the supplier would include a higher margin to cover transmission costs if you consumed a large amount of energy during the Triad periods, and a lower margin if you consumed less.
Flexible Contracts – Alternatively, a flexible (or pass-through) contract allows suppliers to pass on charges from the National Grid. Suppliers would see National Grid charges reconciled in March, this is also when you would expect to see an adjustment to your energy contract, depending on usage.
How to manage the impact of Triads
Consuming more energy during the three Triad periods will result in your business being charged more for its contracted energy supply, compared to a business which uses less, or maintains its usage level.
This means that managing your energy consumption between the months of November to February, specifically whenever a Triad warning is issued can reduce your energy costs at the next March reconciliation, or at the renewal of your contract.
Developing a thorough energy efficiency and management strategy is the best way to take advantage of Triads.
Applying simple measures such as ending operations or closing the office earlier than usual or implementing energy saving measures, so computers and equipment are switched off rather than left on stand-by can have a significant impact in terms of the cost of your energy supply.
If you would like to learn more about how you can develop an effective energy management plan or identify ways to improve energy efficiency and sustainability then get in touch with Briar today by calling us on 01384 397777 or filling out the contact form here.