Yes, many batteries do pay Transmission Network Use of System (TNUoS) charges, specifically Generation TNUoS, depending on how they are connected to the electricity grid and their operational capacity.
Understanding TNUoS Charges for Battery Storage
TNUoS charges are a critical component of the UK's electricity network costs, designed to recover the cost of building, maintaining, and operating the high-voltage transmission network. These charges are levied on both generators and demand users to ensure the network remains reliable and capable of transporting electricity across the country.
For battery energy storage systems, their role can be complex as they can both absorb electricity (acting like demand) and export electricity (acting like a generator). However, when it comes to TNUoS, the focus is typically on their contribution to the system as an energy exporter.
Which Batteries Pay Generation TNUoS?
Not all battery systems are subject to Generation TNUoS charges. The specific criteria depend on their connection point and size:
- Transmission-connected batteries are required to pay Generation TNUoS charges. These are large-scale battery projects directly connected to the high-voltage transmission network.
- Distribution-connected batteries with a capacity greater than 100 MW also incur Generation TNUoS charges. This applies even if they are connected to the lower-voltage distribution network, recognizing their significant impact on overall system demand and supply dynamics.
Batteries that are smaller and connected to the distribution network (below 100 MW) typically do not pay Generation TNUoS, although they may be subject to other network charges, such as Distribution Use of System (DUoS) charges.
Why Do Batteries Pay Generation TNUoS?
The rationale behind these charges for eligible battery systems is rooted in their operational characteristics and impact on the transmission network:
- System Benefits: Large-scale batteries, particularly those connected to the transmission network, can significantly influence grid stability and capacity. They can absorb surplus energy during periods of high generation and low demand, and then release it during peak demand, helping to balance the grid.
- Network Utilisation: By exporting power, these batteries utilize the transmission network in a similar way to traditional power stations. The charges reflect their contribution to the need for and use of the transmission infrastructure.
- Future Investment: The funds collected through TNUoS charges contribute to future investments in the transmission network, ensuring it can accommodate new forms of generation and storage, and continue to provide a secure and reliable electricity supply.
Practical Considerations for Battery Operators
Operators of battery storage facilities need to account for TNUoS charges in their financial models. These charges can be substantial for large projects and affect their overall profitability and operational strategy. Understanding the specific charging methodologies is crucial for project viability.
For instance, the Targeted Charging Review (TCR) has influenced how network charges are applied, shifting some costs from variable charges to fixed charges. While this primarily impacted demand-side users, the broader framework for Generation TNUoS continues to evolve.
To illustrate, consider the differences in how various battery projects might face TNUoS:
| Battery Type | Connection Point | Capacity Threshold | TNUoS Status (Generation) | Key Impact |
|---|---|---|---|---|
| Large-Scale Storage | Transmission Network | Any | Yes | Significant cost component for project economics |
| Very Large Distribution Storage | Distribution Network | > 100 MW | Yes | Recognizes impact similar to transmission-connected |
| Medium/Small Distribution Storage | Distribution Network | ≤ 100 MW | No | Subject to DUoS and other local network charges |
Understanding these distinctions is vital for developers and operators in the rapidly expanding battery storage sector. For more detailed information on charging methodologies, you can refer to official sources like National Grid ESO's charging publications.
