By Chris Ashleigh, Managing Director, Hotel Energy Ltd, an award-winning energy consultancy.

Energy represents one of the highest costs within the hospitality and catering industries and there are new costs coming on stream. This is a detailed guide to ensure you are fully prepared.

New Energy Regulations

Due to the Energy Market Reform, you may soon find that there are a lot more levies and transmission costs added to your energy invoices. These new levies are mainly ‘pass-through’ costs from the network operators and are compulsory to your supply.

From 1st April 2016, all electricity suppliers are obligated to settle/record all SMART metered supplies with profile classes ‘05’ to ‘08’ as half hourly ‘00’ profiled supplies.  This means that if your business’s electricity supply MPAN profile is between these parameters, it will soon be upgraded and you will begin to pay various data and transportation costs associated with larger Half Hourly electricity supplies, such as

  • A mandatory annual Meter Operator – Data Collector/Data Aggregator (MOP/DCDA) agreement. *Between £300 and £500 per annum
  • Distribution Use of Systems (DUoS)
  • Transmission Use of Systems (TUoS)
  • KVA or Capacity Charges.

*Dependent on annual consumption

This is as well as the Renewables Obligation (RO) and Feed-in-Tariff charges (FiT) recently introduced to commercial energy supplies. RO & FiT charges are usually added to the overall unit/kWh price.

energy graphic

An Electricity MPAN is made up of 7 unique sets of numbers and can be found within your electricity invoices. Electricity profile classes are located within the top left hand box.

‘01’ and ‘02’ profile classes are for domestic supplies only.

Commercial electricity profile classes are currently listed between ‘03’ to ‘08’ and known as Sub-100 supplies.  A ‘00’ profile class is known as Half Hourly supply and is intended for high demand commercial supplies.

Tip: If your electricity supply profile class is ‘00’, you already have an AMR/SMART meter fitted.  If your profile class is ’05’-‘08’ and you’re unsure whether there is a SMART meter fitted on site, look at your electricity bill to see if you are paying any data charges.

Energy suppliers are obligated to install AMR (Automated Meter Readers) or SMART meters to every commercial electricity supply in the UK.

Replacement AMR or SMART meters are installed free of charge by energy suppliers, but do incur daily data transmission charges which are added to your invoice.  An AMR or SMART meter operates by sending an energy consumption read (usually via SMS) every half hour to the Meter Operator, eliminating estimations.  Consumption loggers and communication devices can also be added to gas supplies. Your gas supplier may charge you for these to be fitted.

If your business is a large consumer of energy, you should already be registered for the Government’s mandatory Energy Savings Opportunity Scheme (ESOS).

ESOS is a new Government regulation for UK commercial energy user to comply with European Energy Efficiency Directives.  Within the qualifying period of 2014, Businesses that qualify for ESOS would have had:

  • at least 250 employees; or
  • an annual turnover in excess of £42.5 million (€50 million) and an annual balance sheet total of£36.5million (€43m).
  • or is part of a corporate group which includes a UK undertaking which meets the above criteria

The regulation requires that any business that qualifies must complete a full ESOS audit (Where not covered by ISO50001 certification) by an ESOS Lead Assessor.

An ESOS Lead Assessor will also identify any energy savings opportunities, make recommendations of works to be done and notify the scheme of the business’s ESOS compliance.

Now for the bad news, the compliance date for ESOS is 5 December 2015. Businesses who do not comply with ESOS are liable to pay fines up to £50,000 and possibly additional charges of £500 per day until notification of compliance, to a maximum of 80 days.

If you think that any of these new regulations will affect your business and you need to discuss them further, please contact us on 0845 489 10 11 or email us at [email protected].

For more information about Hotel Energy, visit www.hotelenergy.co.uk