TCR removes time of use based TNUoS charges

The Targeted Charging Review (TCR) will remove the time of use based element of Transmission Network Use of System (TNUoS) charges and replace it with a banded fixed charge, a change that was due to be implemented in April 2023¹. The effect on domestic vehicle-to-grid (V2G) economics is set out in the Project Sciurus trial insights report, which found that the change would reduce the annual revenue possible from V2G tariff optimisation by around 50%¹.

Project Sciurus ran from April 2018 with OVO Energy, Cenex, Nissan and Indra, and became a three-year innovation project after its original scope of installing 1,000 domestic V2G units was reduced to between 300 and 400¹. By October 2019 the one hundredth unit was installed, and there are now over 320 V2G units in homes across the UK, with more than 750MWh of energy offset through V2G¹. The analysis in the report covers 305 chargepoints for which data was taken forwards for modelling¹.

The report modelled annual revenue from V2G against an unmanaged charger. Tariff optimisation alone produced £340 a year; adding Firm Frequency Response took this to £513, and adding Dynamic Containment to £725¹. By contrast, smart charging without V2G captured £120 from tariff optimisation¹. The report states that upcoming changes to the structure of charges in domestic tariffs will reduce the annual revenue possible from V2G tariff optimisation by around 50%¹.

"It should be noted that upcoming changes to the structure of charges in domestic tariffs will reduce the annual revenue possible from V2G tariff optimisation by around 50%."

Hardware cost is the other figure the trial reported. The incremental hardware cost at the end of the trial was around £3,700, with installed hardware within the trial costing £4,700 plus VAT, against a lowest price point tested of £3,000 to £3,500¹. The report states that if the incremental capital cost of V2G hardware can be reduced to around £1,000, the payback period could comfortably be below five years¹. Device replacement rate over a three-year period was 5%¹.

Source: Project Sciurus Trial Insights¹

Why it matters for households

For a household weighing up a V2G unit, the revenue side of the calculation rests on shifting energy against a time of use tariff. The TCR change removes that time of use element from transmission charges and replaces it with a banded fixed charge, so the price difference between peak and off-peak periods narrows and the amount a V2G unit can earn from tariff arbitrage falls with it¹. The trial put that reduction at around half¹.

The fixed charge itself is not avoided by charging or discharging at particular times, so it sits on the bill regardless of how a home uses its connection. That shifts the balance of a V2G business case towards grid services such as Firm Frequency Response and Dynamic Containment, which the trial valued at £513 and £725 a year respectively, though it also noted technical challenges in providing Dynamic Containment from a portfolio of V2G units¹. The network charges that make up this part of the bill are set through the regulation and policy process rather than by suppliers.

The trial also found that EVs with battery sizes of 40 kWh or above captured more revenue through V2G tariff optimisation than smaller batteries¹. On the cost side, the incremental hardware figure of around £3,700 at the end of the trial is well above the £1,000 level the report identifies as the point at which payback could comfortably fall below five years¹. The report notes that the initial capital cost remains a barrier for participants¹.

What happens next

The report states that the TCR change was due to be implemented in April 2023¹. No further dated steps are given in the report. The report also records that from April 2021 DUoS export rates for domestic premises became shaped rather than flat¹. The trial itself has concluded¹.

Sources1 cited

1. project-sciurus-trial-insights-report, cenex.co.uk