Suppliers purchase electricity on your behalf through the wholesale electricity market, the Integrated Single Electricity Market (I-SEM). This market arrangement was designed to integrate the all-island electricity market with European electricity markets, making optimal use of cross-border transmission assets, which, according to the SEM Committee is expected to “deliver increased levels of competition which should help put a downward pressure on prices as well as encouraging greater levels of security of supply and transparency”. Obviously, current geo-political events have significantly impacted these expectations, and this is reflected by the present-day ‘high’ wholesale market prices.
As well as the costs associated with purchasing electricity, Suppliers like Community Power are charged by the National Transmission Network and Distribution Network Operators who deliver electricity to your premises.
What is the Transmission System?
The transmission system is the high voltage grid which brings bulk power to all regions of Ireland. It is the backbone of the power system, with interconnection to the lower voltage distribution system. The system of charging for transporting power in bulk across the power system is the Transmission Use of System Charge (TUoS).
TUoS tariffs are designed to recover the total costs involved in operating, maintaining, and developing the transmission system. This includes both generators and large energy users connected directly to the transmission system or indirectly via the lower voltage distribution system.
What is the Distribution System?
Once the electricity has been transmitted to a substation in your local area it then needs to be distributed to your premises. This is done through the distribution system. At the substation, the high voltage electricity from the high voltage transmission lines is passed through step-down transformers that lower the voltage. The electricity is then transmitted to a network of local electric distribution lines and ultimately to your home. The system for charging for the distribution of electricity at a local level is the Distribution Use of System (DUOS). The DUOS charge is a fee that ESB Networks charges suppliers like Community Power for the use of the electricity distribution system. These charges are passed on to you on your Electricity Bill. The amount of DUoS charged for each customer depends on which DUoS Group a customer is classified as, which can be based on several factors including the voltage a premises is connected at, the type of meter installed, or if electricity is exported.
So, when you look at your electricity bill and see the KW/h unit rate charged, this unit rate encompasses, electricity costs, transmission costs and distribution costs all bundled together into an overall KW/h unit rate.
