DCP161 – What you need to know about new Ofgem penalties

The way businesses use energy is continuing to come under scrutiny particularly for those larger energy users.

Ofgem started the process with the introduction of the P272 legislation. This moved maximum demand supplies (those with a profile number of between 05 and 08) to become half hourly supplies. Part of the rational behind this was to increase transparency in when energy is being used and when not.


From 1st April 2018 further legislation, known as DCP161 will be in force. DCP161 is a new measure that has been introduced to ensure that half hourly supplies that exceed their assigned available capacity pay significantly more. This change will ensure that the DNOs (Distribution Network Operators) can recover their costs.

Currently if a supply exceeds its available capacity no penalty is charged. As such there has been no incentive for end users to actively review and increase capacity where required.

With the introduction of DCP 161, users who exceed their set capacity levels will be charged an excess penalty rate. This will be up to three times the standard rate.  If the supply regularly exceeds its assigned available capacity, this could increase overall electricity costs by up to 2% or more.

Take Action

If you have a half hourly supply it makes good sense to check what the level of capacity is set on your supply. This will be shown on your bills as the capacity charge. You then need to ask your Distribution Network Operator for one years’ worth of data for your supply. This will show your daily usage and the peaks in capacity to see if you exceed the levels that have been set.

If this data shows that you regularly exceed the set capacity level then you need to agree a new higher capacity level. This will increase your bills but will be less than the penalties you would face otherwise.

If, however, your supply only exceeded the set level a handful of times in the year it may be more beneficial to leave your level as it is. In doing so and paying the few penalties levied during the year may be the more cost effective solution.

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