Impact of the RCPD charge removal

We completed analysis of the impact of the Regional Coincident Peak Demand (RCPD) charge removal on peak electricity demand in 2022.

The RCPD price signal provided an incentive to reduce peak consumption for the purpose of minimising transmission charges. It was removed from September 2021 due to the transition to the new transmission pricing methodology.

We estimate that removing the RCPD charge increased daily peak consumption by around 150 MW during the top 300 consumption periods in 2022.

Read our report into the impact of the RCPD charge removal on peak demand.

Compared to previous years, 2022 had a high number of periods where available supply of electricity was tight compared to electricity demand. These low residual situations are usually due to a combination of cold weather leading to high consumption, low wind, generation outages and unavailability of slow start generation. When low residual situations are anticipated ahead of time by the system operator, generators are requested to increase available generation capacity to ensure sufficient capacity to meet national demand and prevent a possible grid emergency.

It has been widely quoted that the removal of the Regional Coincident Peak Demand (RCPD) price signal, effective from September 2021, contributed to the increase in low residual situations in 2022 by increasing peak consumption. This project analysed the impact of the RCPD on peak demand in 2022.