Commercial Standby Charge

Jersey Electricity proposes to extend its Standby Charges to all new Commercial customers who generate their own power but who require standby power and grid services for when they are not able to generate sufficient power to support their operational needs.

We believe this is only fair because if those requiring grid backup services did not pay their share of the cost of maintaining the Transmission and Distribution networks, the cost burden would fall on other customers who, in some cases, cannot afford, or do not have the space to install facilities such as solar panels and wind turbines. Over time, this could prove a significant cost resulting in higher tariffs.

See below for more detailed information or visit our Q&A page.

Maintaining the networks

Put simply, the unit cost of electricity Islanders currently pay is made up of the wholesale price we pay for power, whether that be from our French supplier EDF or the States’ Energy from Waste plant, or the cost of generating at La Collette and Queen’s Road, plus a portion to cover maintaining and operating the networks over which it is transmitted and distributed.

Businesses generating their own power while still being connected to the grid are buying fewer units from JE and therefore contributing less to the maintenance and operation of the grid and nothing to the procurement of power they still want on standby - and has to be made available instantaneously - if the sun doesn’t shine on their solar panels or the wind doesn’t blow on their turbines. 

Without a Standby Charge to cover a fair share of these costs, their share of the burden will fall on everyone else; in effect, subsidising all businesses with embedded generators such as renewables. 

The Standby Charge does NOT apply to all renewable facilities

•The Standby Charge will NOT apply to commercial renewable facilities that export all their electricity to the grid (as these facilities do not require a back up service),

•The Standby Charge will NOT apply to facilities installed as emergency backup in case of grid failure (as these facilities do not require a back up service),

•The Standby Charge will NOT apply to any commercial facility installed before the implementation date (until change of ownership or replacement of generating units).

The charge is not new

Standby Charges are not new. JE has applied them in some form for many years to a number of existing Commercial customers who generate their own electricity but require standby capacity and support services from the grid when their equipment fails or needs maintaining.

Standby Charges are already levied in Guernsey and the Isle of Man at higher rates than we are proposing here. It is also worth noting that Jersey’s Electricity has kept prices stable for over four years and our tariffs remain very competitive when compared with other jurisdictions, including Guernsey, the Isle of Man, the UK and Europe.

We would like to keep it that way by ensuring commercial embedded generators (including those generating from renewable sources) pay a fair charge for the services from which they are benefiting. 

Why Jersey does not subsidise renewables

Jersey is different to the UK and many other countries. Subsidies, such as the Feed In Tariff in the UK, were introduced as incentive to move away from high carbon electricity generated at coal fired power stations. JE has already de-carbonised the Island’s electricity supply (it is already more than 10 times cleaner than the UK supply) making subsidy of renewables impossible to justify on those grounds. 

Similarly, renewables will not help security of supply which is also presently around 10 times better in Jersey than the UK. As intermittent generation, renewables will not allow JE to take our own emergency standby generation at La Collette off the system and therefore do not reduce the costs of providing that standby generation. 

There are alternatives

We also believe there are far more cost effective ways of encouraging renewables which we are discussing with the States. There are also more effective ways of reducing Jersey’s carbon emissions further by switching from oil and gas-fired heating to renewable heating in the form of heat pumps. And now with a third of emissions emanating from transport, much could be done by encouraging the uptake of electric vehicles to which this Island is ideally suited.

Therefore, none of the arguments for subsidising renewables in other countries apply to Jersey; least of all for having those that do not have renewables subsidising those that do.

The head of Ofgem, the UK energy market regulator, said there was a risk that those who could afford to harvest their own energy and avoid network charges and policy costs that are passed on via bills would leave a ‘shrinking pool of less wealthy customers to shoulder such costs’.

He questioned whether it would be acceptable if ‘many of the wealthier in society were having very, very low energy costs because they weren’t paying network costs, they weren’t paying policy costs and those costs were then being smeared over a smaller section of less well off people, including potentially on the vulnerable’. He suggested those who wanted to maintain a grid connection for emergencies paid something ‘akin to an insurance premium’. 

Types of generators

Embedded Generator (EmG) is connected to a customer’s supply. It provides electricity for onsite use by a customer (either by being co-located or connected by private wire) and has the capability to export any surplus electricity as well. JE provides the remainder of the electricity demand of the site, which includes a standby service when the EmG is not operational. Standby charge applies. 

Solar Panels, Wind Turbines, Waterwheels

Export Generator (ExG) solely exports electricity to JE. Sale of energy only and no standby services are provided. Standby Charge does not apply.

Large scale Solar farm, Wind farms, tidal power

Standby Generator (SG) purely supports on-site energy demand when JE power is unavailable. No capability for parallel operation and cannot therefore export power to Jersey Electricity. Standby Charge does not apply.

Generating engines, UPS supplies 

For more information on the commercial standby charge, please visit our Q&A page.