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CMP308: Removal of BSUoS charges from Generation

What is it?

Balancing Services Use of System (BSUoS) charges cover the cost incurred by National Grid acting as the Electricity System Operator (ESO) as it maintains a balanced electricity system. BSUoS is volumetric charge, based on the cost of balancing the system in each half hour, spread across total chargeable volume on the system in that half hour. This charge is applied to consumers and large, transmission-connected generators; however, from April 2023 all the costs will be recovered from consumers.

Why is it changing?

Currently, smaller distributed generators do not pay BSUoS charges, meaning that they are able to offer cheaper wholesale power, due to transmission-connected generators needing to factor BSUoS charges into the wholesale price they charge. Distributed generators can also bid at a lower price in CM & CfD auctions. Ofgem considers these differences could lead to market distortions that it is seeking to eliminate.

How does that impact businesses?

On 25th April 2022, Ofgem approved the modification CMP308: Removal of BSUoS Charges from Generation. This modification will lead to BSUoS rates effectively doubling for all consumers.

When will it come into effect?

The change in BSUoS rates will come into force from 1st April 2023.