KVA Availability Charges: Optimising Your Capacity

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Your DNO bills you for capacity you reserved, not capacity you used. Most businesses are dramatically overallocated, bleeding money on phantom demand charges every single month. The brutal truth: your machinery could sit idle and those charges wouldn’t budge. Find out how much you’re actually overpaying and what you can do about it.

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You’re paying for capacity you booked, you’re billed for capacity you reserved, and you’re stuck with charges whether you use that capacity or not. That’s the brutal reality of KVA availability charges. Your DNO doesn’t care if your machinery sat idle last month—they care about what you promised you’d need. And here’s the thing: most businesses are dramatically overallocated. The question isn’t whether you’re overpaying. It’s by how much.

What Are KVA Capacity Charges?

Before you panic at another confusing line item on your electricity bill, let’s break down what KVA capacity charges actually mean. Simply put, KVA (kilovolt amperes) represents the power capacity your business has reserved from the electricity network. Think of it as your guaranteed slice of the grid. One kVA equals 1,000 watts.

Here’s the thing. You’re paying for this reservation whether you use it or not. It’s a fixed daily fee that shows up under labels like “DUoS” or “Supply Availability Charge.” Your Distribution Network Operator sets these rates. For example, with a 50 kVA allocation at 3.18 pence per kVA, you’d pay £1.59 daily just for that reserved capacity. This charge applies to all customers with Half-Hourly metres installed at their premises.

Why does this matter? Because grasping your allocated capacity directly impacts your demand forecasting and tariff negotiation strategies. Understanding your energy procurement options can help you optimise these charges alongside your overall energy costs. Conducting an energy audit will reveal whether your current capacity allocation aligns with your actual business needs. Get it wrong, and you’re either overpaying or facing steep penalties.

Are You Paying for kVA Capacity You Never Use?

How often do you actually check whether your kVA allocation matches what your business really needs?

Here’s the thing. Your DNO sets your capacity, not your supplier. And that allocation? It’s billed daily. Every single day. Whether you use it or not.

Let’s talk numbers. A 290 kVA business pays around £7,134 annually in capacity charges alone. That’s before you’ve even switched on the lights.

Proper meter optimisation reveals the gap between what you’re paying for and what you’re actually using. Many businesses sit well below 75% of their allocated capacity. That’s money walking out the door. Since DCP161 came into effect in April 2018, exceeding your agreed capacity can trigger penalties up to three times the standard rate.

Contract auditing catches what most people miss. These aren’t flashy costs. They’re quiet ones. The kind that add up whilst nobody’s watching. Implementing energy management solutions can help identify where capacity is being wasted and optimise your usage patterns. Advanced monitoring systems provide real-time reporting to track your actual demand against allocated capacity. A kVA review compares your actual demand against your agreed capacity, and submitting a reduction request to your DNO can apply savings mid-contract without waiting for renewal.

You’re probably in that club too.

How DNOs Calculate Your Monthly kVA Bill

Available Supply Capacity (kVA) × Capacity Charge Rate (p/kVA/day) × Days in Billing Period. Divide by 100. That’s your monthly hit in pounds.

Rates run around 5.5p/kVA/day, and that adds up fast. Every single day. Whether you’re running flat out or completely dark.

• Peak shaving becomes your best friend when demand spikes threaten excess charges
• Tariff optimisation starts with grasping these calculations inside out
• Your authorised capacity sets the baseline—actual usage is almost irrelevant

Exceed your limit? You’ll pay excess capacity charges. Same rate, applied to every kVA over your authorised amount. It stings. Strategic energy management solutions can help identify where capacity reductions are possible across your operations.

Real-time monitoring tools can track your consumption patterns and help identify opportunities to avoid these excess charges before they occur.

Maximum Demand vs Authorised Capacity Explained

Let’s clear up some confusion.

Maximum demand is the actual peak power your site pulls from the grid during any half-hour period—it’s what you’re really using.

Authorised Supply Capacity, on the other hand, is the limit you’ve agreed with your DNO that you won’t exceed, and it was probably set when your supply was first installed.

Understanding these distinctions is crucial for energy contract management and ensuring you’re not paying for unnecessary capacity whilst still meeting your operational needs. By implementing real-time data capture through energy monitoring systems, you can track your actual consumption patterns and identify opportunities to align your authorised capacity with genuine requirements.

Understanding Maximum Demand

Before you can make sense of KVA availability charges, you need to comprehend maximum demand. It’s the highest level of electrical power your business draws during peak intervals. Not your average usage. Your absolute maximum.

Here’s the thing. Suppliers measure this over 30-minute blocks. They’re watching. The highest sustained current draw you hit? That becomes your number. And it matters for demand forecasting because utilities need to plan for what you’ll actually use.

• Maximum demand is measured in kW or kVA, not kWh—big difference
• Your reading captures the peak power value your mains conductor carries
• Measurement should span multiple seasons to catch those sneaky load variations

Simple, right? Well, it gets messier when charges come into play. Understanding your maximum demand is essential for usage profiling and ensuring your business receives accurate tariffs tailored to actual consumption patterns. Proper monitoring of your demand data also supports billing accuracy checks to prevent overpayment on capacity charges.

Authorised Capacity Explained

Whilst maximum demand shows what you actually use, authorised supply capacity is what you’re allowed to pull from the grid. Think of it as your electricity ceiling. Your DNO set this limit years ago, probably when you first moved in. And here’s the thing—it might be completely wrong for your current needs.

Capacity auditing reveals whether you’re paying for power you’ll never touch. Too high? Wasted money. Too low? Penalty charges averaging 73% higher than standard rates. Neither option feels great, honestly.

How to Spot Overallocated Capacity on Your Bill

Your energy bill holds the clues, but you’ve got to know where to look.

Start by finding your Maximum Demand (MD) reading and comparing it against your Authorised Supply Capacity (ASC)—if there’s a big gap between what you’re actually using and what you’re paying to have available, that’s your red flag.

Any excess capacity charges sitting on that bill? Yeah, those are basically fees for headroom you’re not using.

Reading Your Bill

Spotting overallocated capacity on your bill isn’t rocket science, but you’d be surprised how many businesses never bother to look. Your billing layout typically separates capacity charges from consumption charges. Look for “Capacity charge” or “Supply Availability charge” as a line item. That’s your starting point.

Here’s what you’re hunting for:

• Maximum Import Capacity (MIC): The kVA level you’ve agreed to reserve from the network
• Maximum Demand: Your actual highest kVA recorded during the billing period
• Excess Capacity charges: Any amount charged when demand exceeds your MIC

Check your meter glossary if terms seem confusing.

Compare those two numbers. If Maximum Demand consistently sits way below your MIC? You’re probably paying for power you’ll never use. Classic overallocation.

Comparing MD Against ASC

Once you’ve located those capacity figures on your bill, the real detective work begins. You’re looking for a mismatch. Your Maximum Demand should sit comfortably below your Authorised Supply Capacity. If it doesn’t? That’s a problem.

Here’s the thing. When your capacity charges stay flat month after month—completely ignoring how much electricity you actually use—you’ve probably got overallocated capacity. You’re paying for bandwidth you’ll never touch. Great for the DNO. Not so great for your budget.

Proper capacity monitoring reveals the gap between what you’re paying for and what you need. Demand forecasting helps you grasp patterns over time. Without both, you’re flying blind.

No excess charges on your bill despite high readings? Your capacity’s set right. Just potentially wastefully high.

Identifying Excess Capacity Charges

Excess capacity charges tend to pop up on your bill like uninvited guests. They’re sneaky. Look for line items labelled “Excess Capacity” or “Excess Availability”—these sit separate from your standard charges for a reason. They’re penalties, plain and simple.

Spotting billing anomalies takes some detective work. Your metre diagnostics matter here, especially if you’ve got a Half-Hourly metre setup.

• Unusual spikes in monthly charges compared to what you’ve paid before
• “Excess Capacity” line items appearing outside your normal contractual terms
• Discrepancies between your peak demand and allocated kVA on billing statements

Here’s the blunt truth: if your actual usage keeps exceeding your threshold, you’re bleeding money. These charges can hit 2-3 times your standard rate. That adds up fast.

Five Ways to Lower Your KVA Charges Today

Cutting down your kVA availability charges doesn’t require a PhD in electrical engineering. Here’s the thing: most businesses are bleeding money without realising it.

Run energy audits. They reveal where you’re wasting power. Simple as that.

Shift operations to off-peak periods. Peak shifting behavioural incentives actually work. Move your heavy-hitter activities to cheaper hours.

Train your people. Staff who grasp energy efficiency protocols consume less. Revolutionary concept, right?

Deploy load management systems. Real-time monitoring stops you from exceeding your agreed capacity. No more surprise penalties.

Consider energy storage and renewables. Solar panels and on-site generation reduce what you’re pulling from the grid during expensive peak times.

None of this is rocket science. It’s just about paying attention to what you’re actually using.

When to Request a KVA Capacity Review

Timing matters more than you’d think regarding requesting a kVA capacity review. Your DNO opens that window once a year. Miss it, and you’re stuck paying for capacity you don’t need for another twelve months. Not ideal.

Here’s when to seriously consider making that call:

• Your business has relocated, and capacity was set based on the previous tenant mix—not your actual operations
• You’ve implemented peak shifting strategies that have genuinely lowered your maximum demand
• Historical data shows you’re consistently using way less than your agreed supply capacity

Contract renewals? That’s your golden opportunity. Production scaled back? Equipment removed? These aren’t just operational changes. They’re signals. Your capacity needs have shifted. The question is whether your charges will shift too.

Why Your Region Might Double Your kVA Costs

Where you plug in your business matters way more than most people realise.

Capacity charges swing wildly between 120p and 330p per kVA monthly. That’s nearly triple the difference depending on your postcode. Fun, right?

Your postcode could be costing you nearly triple in capacity charges—location matters more than you think.

The North East gets hit hardest by regional volatility. Why? Pipeline constraints and limited transmission infrastructure create supply headaches during peak demand.

Meanwhile, the Midlands sits pretty with more stable pricing because they’ve got better supply access.

Ofgem updates these charges annually, so your costs aren’t even consistent year to year. Different distribution areas mean different fee structures.

Your neighbour across the regional boundary might pay considerably less for identical capacity.

Seven regional grids control electricity delivery. Your grid assignment directly shapes what you’ll pay.