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3rd November 2017

Upcoming Changes to Triad Payments

Autumn is a time for looking forward in the power generation industry to the increased demand of the winter months and, for many plants in the UK, the Triads. In the past this has been some of the highest earning points during the year with the TNUoS Residuals for smaller operators (<100MW), allowing these generators to reduce their bids in the capacity market and still return a profit.

In March this year Ofgem confirmed changes to the triad payments beginning in 2018 that would reduce the value by a third every year till 2021. This could cause problems for any generators who secured contracts in 2014 and 2015 before the review was announced. These plants would face a significant reduction in revenue compared to their forecasts.

The TNUos Residuals are dependent on the average energy production during the triads, the three highest demand half hour periods between November and March. Maximising the production during these three periods could lead to large increases in Triad payments before the reduced revenue potential in the coming years.

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