Can I get free upgrades to my electricity supply capacity? All you need to know about SCR!
Here’s the Plan says
‘Any business needing to increase their supply capacity to accommodate expansion or as part of a self-generation project should look at doing it now. With the drive towards electric vehicles and the future necessity for EV chargers, the savvy business owner should be looking to secure extra capacity now under this subsidised scheme while it lasts.
Until now the costs of upgrading or ’reinforcing’ the local network had to be borne solely by the business placing the connection request, but all that has changed as a result of SCR. This came into effect from 1st April 2023 and will run for an initial 12 month period. Your DNO is now required to pay for the upgrades but it is not all free money."
Read on to find out more...
What is it?
The full title of this project is the Network Access and Forward Looking Changes Significant Code Review, though it is usually referred to as Access SCR or just SCR.
SCR is an Ofgem lead project which overhauls the way that distribution network charges are set and recovered in Great Britain.
SCR focuses solely on Distribution (DUoS) costs, not transmission.
Why is it happening now?
The electricity grid needs to be reinforced to meet the expected increases in demand for connections as fossil fuels are replaced by renewable electricity as part of the UK’s drive to achieve Net-Zero by 2050.
One of the biggest challenges faced by DNOs is increasing congestion on distribution networks in certain areas. High levels of both generation and demand are pushing electrical infrastructure towards its safe limits. This can see many proposed energy projects, both demand and generation, being turned down over concerns they will put their local network under undue strain, risking disruption to power supply.
Why do I need to know about it?
SCR has major implications for companies seeking to connect to, or upgrade existing connections, to the grid.
The new proposed charging structure went live on 1st April 2023 for an initial 12 month period.
Will it help or hinder?
Currently, a customer wanting a new or upgraded connection would have to pay for the total cost of upstream reinforcement work, for example a new substation, which often proves prohibitive and prevents projects from going ahead.
With SCR, upgrade reinforcement works are covered by the DNO up to a certain threshold – above this the customers have to cover the excess cost in full. The threshold protects the wider customer base from excessive costs triggered by connections requiring significant reinforcement works.
This should result in much lower connection charges if the connection request requires reinforcement works.
The DNO now charges for reinforcement based on capacity required.
New rules have been also been introduced about whether ‘second comers’ have to reimburse the first comer depending on how the initial project was funded.
The downside is that these additional distribution costs have to come from somewhere so they will inevitably end on everybody’s electricity bills as increased DUoS Charges.
Will there be different charges for generation (eg solar PV or wind ), storage (eg Batteries) or demand (upgraded capacity)customers?
Yes, broadly speaking an application for electricity Generation or Storage connection will both be considered as a Generation connection. An application for a Demand connection will be considered differently at a different cost.
So what is the threshold cost above which I would need to pay reinforcement charges?
This is calculated per project based on the siteworks required and is called the High-Cost Project Threshold (HCPT).
For Demand this is £1720/kVA
For Generation this is £200/kw
If the total cost of the project falls below the HCPT the customer does not pay for any reinforcement works.
Sounds good – can you give me a worked example ?
A motor dealership wants to upgrade their supply capacity by 70 KVA. The maximum cost of this project which would be funded by the DNO would be
70 x £1720 = £120,400
Anything above this would need to be funded by the customer.
Anything else I need to be aware of ?
Yes, the funding from the DNO only covers the Reinforcement aspect of the upgrade. Any other ‘hardware’, such as a new substation, cabling and metering etc is not covered and can mount up to a significant cost that the customer is 100% liable for.
If you need an electricity new connection or supply upgrade The Team at Here’s the Plan can help. Get in contact for a no obligation consultation with one of our friendly and experienced team members.
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