Leading global energy services company LR Senergy, which has bases in Aberdeen and Edinburgh has helped a major wind farm operator to recoup almost £1.5 million in miscalculated Distribution Use of System (DUoS) charges following an investigation into the charging methodology applied at two Scottish wind farms.
LR Senergy was approached by the wind farm developer in 2012 to conduct an investigation into the DUoS charges implemented by the local Distribution Network Operator (DNO), Scottish Hydro Electric Power Distribution (SHEPD), at one of its sites between April 2006 and March 2012. The fees in question were higher than the expected for this particular wind farm.
All users connected to the distribution network must pay DUoS charges to the DNO for importing and exporting power to the network, and this dispute focused on the methodology and formula used by the DNO to calculate the import chargeable capacity of the site.
LR Senergy’s study revealed that the charging formulas being applied by SHEPD were in fact incorrect and this had resulted in a significant DUoS overcharge for the wind farm during the period in question. LR Senergy also calculated what it believed to be the correct charges and presented its findings to SHEPD, which referred the matter to OFGEM for determination. The firm successfully represented its client through a lengthy period of arbitration that concluded in a £700,000 rebate for the wind farm operator.
Having successfully resolved this first dispute, LR Senergy was then asked to conduct further investigations into another of the wind farm operator’s sites, also in the SHEPD area, which it suspected had been subject to the same billing methodology and overcharging issues by the DNO.
Again LR Senergy’s study revealed that the wind farm had been overcharged DUoS and correct charges were calculated; another arbitration period ensued which ended with a £770,000 payout to the wind farm operator.
Dr Jason Hill, power engineering manager for UK & Northern Europe at LR Senergy, said:
“The methods used in calculating DUoS charges involve a variety of factors and there is a potential for confusion. We would recommend that users seek professional advice if they are unsure whether the charges are correct.
“Around 12% of the total bill should be made up from DUoS charges and during the period in question this was considerably higher. We were asked to investigate by our client due to the excessive charges that were being applied.”
The determination decision document explaining the issue in more detail is published on Ofgem’s Electronic Public Register go to LR to connect.