P272: The new regulation that could prove vital for business energy efficiency
Large businesses are being urged to seize the opportunity of gaining a more detailed and accurate breakdown of their energy consumption as an important new regulation comes into effect on Saturday (1 April).
The P272 guidelines set up by Ofgem will require energy suppliers to automatically use more detailed energy usage data, known as half-hourly consumption data (HH), to calculate customers’ bills. Originally scheduled for release April 2016, the implementation date of the regulation was delayed for companies to gradually phase in any changes.
Every business using an electricity meter is assigned an electricity profile class from 01 through to 08. This class is based on the organisation's electricity consumption pattern and load profile. Businesses with profiles 05, 06, 07 and 08 are referred to as Maximum Demand (MD) customers. If your business falls into this category, your meter will have the ability to measure peak demand for a given period and therefore you will be affected by this new piece of legislation.
P272 affects more than 160,000 MD businesses that use advanced automatic meter reading (AMR) systems. These businesses need to have an appointed meter operator (MOP) and data collector (DC) to maintain and run the meters, and send the new readings to energy suppliers.
The half-hourly data received by the suppliers will then enable businesses to more accurately identify and embed energy efficiency measures, with the potential for associated cost savings. The P272 regulation was initially raised by independent green energy supplier SmartestEnergy, which insists that the changes will also allow companies to engage in demand response measures.
“As the original proposer of P272, we have always believed that half-hourly settlement is vital for large business customers,” SmartestEnergy vice president I&C supply Andy Cormie said. “The accurate and timely data it provides is a powerful tool to help companies actively manage their consumption to control costs and encourage staff to be more energy efficient.
“The P272 changes will also enable thousands more businesses to participate in Demand Side Response activities to support the grid – either shifting their consumption out of peak times or turning processes off completely to reduce usage.
“A business that can shift 1MW of consumption could secure around £80,000 annually from Capacity Market revenue and avoided peak costs. We would encourage all businesses impacted by P272 to explore this opportunity and we will certainly be working with our customers on this.”
The regulation will come as welcome news to large businesses across the country, especially in the light of research earlier this week which revealed UK firms could be losing out on more than £500m in inaccurate charges and miscalculated utility bills.
Research shows that efficiency measures such as energy management, lighting, heating and metering can save business around 25% on business energy costs. A sample of almost 100 Energy Savings Opportunity Scheme (ESOS) audits by the Carbon Trust found the average cost reduction achievable through the implementation of energy saving opportunities stood at 20%.
While the Government introduced the Energy Savings Opportunity Scheme (ESOS) to help simplify the energy landscape for businesses, a recent edie investigation found that compliance rates for the scheme are below expected levels, with hundreds or possibly thousands of qualifying organisations still unaccounted for almost a year after the final deadline.
The introduction of P272 could help to alleviate the potential of more stress on the bottom line for businesses from this weekend, with the introduction of rising business rates, an increased national living wage and the new workplace pension scheme all coming into effect on 1 April.