Your contract and invoice

Your contract may have these charges included in your overall agreed price; if so they won’t be shown on your invoice. Or you may have these items separated out, in which case they will be shown as separate line items on your invoice.

Examples of government originated charges are the Feed-in Tariff (FIT) and Electricity Market Reform (EMR) charges such as Contracts for Difference (CfD) and Capacity Mechanism (CM). Examples of third party charges include Distribution Use of System (DUoS), Balancing Services Use of System (BSUoS) and Transmission Network Use of System (TNUoS).

Charge Who it's paid to What it's for
Balancing Services Use of System (BSUoS)

Who it's paid to

National Grid

What it's for

Charge for keeping the network in balance
Climate Change Levy (CCL)

Who it's paid to

HM Revenue & Customs (HMRC)

What it's for

A tax on energy aimed at increasing energy efficiency and reducing carbon emissions
Contracts for Difference (CfD)

Who it's paid to

HMRC

What it's for

Support scheme for low carbon generators which provides long-term price certainty to increase investment
Distribution Use of System (DUoS)

Who it's paid to

Distribution Network Operator (DNO)

What it's for

Charge for distributing electricity across the distribution network to the customer supply point
Feed-in Tariff (FIT)

Who it's paid to

Ofgem

What it's for

Levied on suppliers to fund the FIT scheme designed to incentivise new renewable generation
Flexible purchasing

Who it's paid to

Supplier

What it's for

Charges/credits for flexible purchasing - not applicable for fixed contracts
Renewable Obligation (RO) Ofgem

Who it's paid to

What it's for

Levied on suppliers to fund the RO scheme
Settlement and agency charges

Who it's paid to

Data Collector (DC), Data Aggregator (DA) and Meter Operator (MOP)

What it's for

Charges for DC (retrieving meter reads or consumption data), DA (for industry settlements purposes) and MOPs (maintaining the meter)
Transmission Network Use of Sytem (TNUoS)

Who it's paid to

National Grid

What it's for

Charge for using and maintaining the transmission network

What is the Capacity Mechanism (CM)?

The CM is an Electricity Market Reform (EMR) mechanism to help the UK meet its carbon reduction targets and ensure security of electricity supply. The CM is designed to make sure we have sufficient power available to meet our future needs. It operates as an annual auction, which started in December 2014, to procure the majority of the UK’s required energy capacity four years in advance. There is a top-up auction one year ahead of delivery to enable Demand Side Response (DSR) to participate. The cost of running the CM is passed through to consumers.

How CM is charged

The Operational Costs Levy reflects the running cost of the scheme set by the Electricity Settlement Company (ESC). This is a fixed unit rate per kWh for each 12-month period. The full CM levy costs were introduced on 1 November 2016, when DSR participation began.

For Half-Hourly (HH) sites, CM can either be charged as a pass-through cost which will appear as a separate line items on invoices, or consolidated in the overall supply rate customers pay. For Non-Half Hourly (NHH) sites, CM can only be consolidated in the overall supply rate.

For HH pass-through, two CM charges will appear on your invoice:

  • The Operational Costs Levy, as described above.
  • The Obligation Levy which reflects the costs of the capacity auctions (DSR and generation) will be charged during the winter peak period (November to February between 4.00pm and 7.00pm on working days). This will initially be charged using a forecast rate and reconciled once the winter peak period has ended and an actual rate can be calculated.

CM rates

1 April 2020 to 31 March 2021
CM Operational rate
This charge is fixed annually
0.003 p/kWh
(£0.03/MWh)
Forecast charge Actual charge Actual charge Actual charge
1 November 2020 to 28 February 2021 1 November 2019 to 29 February 2020 1 November 2018 to 28 February 2019 1 November 2017 to 28 February 2018
CM Obligation Levy 11.857p/kWh (£118.57/MWh) 7.734p/kWh (£77.34/MWh) 8.542 p/kWh (£85.42/MWh) 3.646p/kWh(£36.46/MWh)

What is Contracts for Difference (CfD)?

An Electricity Market Reform (EMR) mechanism to help the UK meet its carbon reduction targets and ensure security of electricity supply open/close

The CfD is designed to support investment in new low-carbon generation, with a technology-dependent fixed price known as the 'strike price' (wholesale price + top-up subsidy). The CfD costs will vary annually due to wholesale price fluctuations and amount of CfD generation produced in each year.

CfD costs are met by a levy applied to energy suppliers, which are then passed on to consumers.

How CfD is charged

For Half-Hourly (HH) sites CfD can either be charged as a pass-through cost, quarterly fixed or consolidated in the overall supply rate customers pay. For Non-Half Hourly (NHH) sites CfD can either be quarterly fixed or consolidated in the overall supply rate.

Pass-through charges will appear on your invoice under a heading of ‘Contracts for Difference (CfD)’. The single forecast or actual charge is made up of two elements:

  • Operational Costs Levy reflects the running costs of the scheme set by the Local Carbon Contracts Company (LCCC). This is a fixed unit rate per kWh for each 12-month period.
  • Supplier Obligation Costs reflect the amount of low-carbon electricity funded by the scheme, and is based on the subsidy paid to each CfD generator based on volume of energy generated and wholesale electricity costs. As this will vary throughout the year, a forecast rate will be issued at the start of each quarter and an actual rate then confirmed after each quarter. Once the actual rate is known a reconciliation will be performed to amend any charges invoiced using a forecast rate.

Quarterly fixed charges - This is a quarterly fixed fee that we will calculate and revise as necessary each quarter. This avoids the need for multiple reconciliations and complex calculations. This option is available for both HH and NHH metered supplies.

CfD rates

Pass-through charges:

Initial reconciliation rate Quarter forecast
1 July 2019 to 30 September 2019 1 October 2019 to 31 December 2019  1 January 2020 to 31 March 2020  1 April 2020 to 30 June 2020 1 July 2020 to 30 September 2020
1 October 2020 to 31 December 2020 
CfD Operational Cost rate
This charge is fixed annually
0.006 p/kWh (£0.06/MWh) 0.006 p/kWh (£0.06/MWh) 0.006 p/kWh (£0.06/MWh)   0.006 p/kWh (£0.06/MWh) 0.006 p/kWh (£0.06/MWh)
 0.006 p/kWh (£0.06/MWh)
CfD Supplier Obligation rate 0.592 p/kWh (£5.92/MWh) 0.647 p/kWh (£6.47/MWh) 0.755 p/kWh (£7.55/MWh)   0.784 p/kWh (£7.84/MWh) 0.832 p/kWh
(£8.32/MWh)
 0.973 p/kWh
(£9.73/MWh)
Total rate
as shown on customer invoices
0.604 p/kWh (£6.04/MWh) 0.653 p/kWh (£6.53/MWh)  0.761 p/kWh (£7.61/MWh)  0.791 p/kWh (£7.91/MWh) 0.838 p/kWh
(£8.38/MWh)
0.979 p/kWh
(£9.79/MWh) 

The actual rate is rounded to three decimal places. Please refer to these PDFs for the individual daily rates:

Quarterly fixed charges:

1 April 2019 to 30 June 2019 1 July 2019 to 30 September 2019 1 October 2019 to 31 December 2019 1 January 2020 to 31 March 2020 1 April 2020 to 30 June 2020  1 July 2020 to 30 September 2020 1 October 2020 to 31 December 2020 
CfD quarterly fixed rate 0.606 p/kWh (£6.06/MWh) 0.671 p/kWh (£6.71/MWh) 0.739 p/kWh (£7.39/MWh) 0.681 p/kWh (£6.81/MWh) 0.880 p/kWh (£8.80/MWh)  1.141 p/kWh (£11.41/MWh)   1.078 p/kWh (£10.78/MWh)

What is the Renewables Obligation (RO)?

A government scheme to support large-scale renewable generation.

The Renewables Obligation (RO) is a UK government scheme to support the development of large-scale renewable energy generation, in order to help meet the UK’s climate change objectives. It was introduced in 2002 but closed to all new generation contracts at the end of March 2017, and was replaced by the Contracts for Difference (CfD) scheme. However, existing RO contracts will continue to run until 2027. The RO is funded by suppliers, with costs then recouped from consumers.

How RO is charged

RO can either be charged as a pass-through cost which will appear as a separate line item on invoices, or consolidated in the overall supply rate customers pay. Both these options are available to Half-Hourly (HH) and Non-Half Hourly (NHH) customers.

RO pass-through rates:

Year
1 April 2017 to 31 March 2018 1 April 2018 to 31 March 2019 1 April 2019 to 31 March 2020 1 April 2020 to 31 March 2021*
RO rates 1.882 p/kWh (£18.82/MWh) 2.210 p/kWh (£22.10/MWh) 2.361 p/kWh (£23.61/MWh) 2.357 p/kWh (£23.57/MWh)

*Forecast RO rates above are based solely on the published Buy Out Price and Obligation Level. npower Business Solutions (nBS) reserves the right to re-forecast pass-through levels in line with any RO shortfall/expected mutualisation impacts and will reconcile to actual costs once known.

What is the Feed-in Tariff (FIT)?

A government scheme to support small-scale renewable generation

The FIT is a government scheme designed to support small-scale renewable generation in businesses and homes. It was launched in 2010 and offers an index-linked payment for every kWh of energy produced for a 10-25 year period, with different rates for different technologies. It is funded by suppliers based on market share, with costs then recouped from consumers. However, the scheme closed to new entrants from 1 April 2019.

How FIT is charged

FIT can either be charged as a pass-through cost which will appear as a separate line item on invoices, or consolidated in the overall supply rate customers pay. Both these options are available to Half-Hourly (HH) and Non-Half Hourly (NHH) customers.

Pass-through costs are not known up front so are initially estimated for each FIT year (1 April to 31 March). There will be a reconciliation performed during the October to December quarter after a FIT year has ended and the actual costs are known.

FIT pass-through rates

FIT cost
Forecast charges Actual charges
1 April 2016 to 31 March 2017 0.494 p/kWh (£4.94/MWh) 0.480 p/kWh (£4.80/MWh)
1 April 2017 to 31 March 2018 0.547 p/kWh (£5.47/MWh) 0.519 p/kWh (£5.19/MWh)
1 April 2018 to 31 March 2019 0.567 p/kWh (£5.67/MWh) 0.560 p/kWh (£5.60/MWh)
1 April 2019 to 31 March 2020 0.642 p/kWh (£6.42/MWh) 0.623 p/kWh (£6.23/MWh)
1 April 2020 to 31 March 2021  0.707 p/kWh (£7.07/MWh) £ to be advised before 1 January 2022 

What is the Climate Change Levy (CCL)?

CCL is a tax on the use of certain fuel and power, including gas and electricity, by non-domestic users in the UK.

It was introduced to incentivise businesses to reduce their energy consumption and to become more energy efficient, thereby reducing carbon emissions.

As your energy supplier, we collect this levy via your invoice on behalf of HMRC.

How CCL is charged

CCL is charged on the kWh of gas and electricity shown on your invoice. There are separate CCL rates which apply for gas and electricity.

The rates of CCL are usually increased annually at the start of the tax period from the 1st April.

CCL is not chargeable on:

  • Supplies for domestic use.
  • Supplies to charities in relation to their non-business activities.
  • Supplies to business customers who use very small quantities of energy.

Some supplies qualify for a reduced rate of CCL. Where that is the case, the customer must submit a PP11 Supplier Certificate to us in order for the relief to be applied to the account.

Further information on CCL, including the details of the exclusions and the reliefs, is available on the HMRC website.

CCL rates

Year
1 April 2018 to 31 March 2019 1 April 2019 to 31 March 2020 1 April 2020 to 31 March 2021 1 April 2021 to 31 March 2022
Electricity CCL rates 0.583 p/kWh (£5.83/MWh) 0.847 p/kWh (£8.47/MWh) 0.811 p/kWh (£8.11/MWh) 0.775 p/kWh (£7.75/MWh)
Gas CCL rates 0.203 p/kWh (£2.03/MWh) 0.339 p/kWh (£3.39/MWh) 0.406 p/kWh (£4.06/MWh) 0.465 p/kWh (£4.65/MWh)