When businesses look for ways to reduce energy costs, attention naturally turns to consumption. But for many larger commercial buildings, there is another figure worth checking: your agreed supply capacity, or how much electrical capacity you are paying to have available.

That capacity may have been set years ago for a previous occupier, a different building use or an expansion that never happened.

The building changes. The capacity often doesn't. And that can leave businesses paying capacity charges for far more electrical capacity than they actually need.

What is the agreed supply capacity?

For larger electricity connections, the Distribution Network Operator (DNO) agrees the maximum level of power a property can draw from the network. This is known as the Agreed Supply Capacity (ASC) or Maximum Import Capacity (MIC), and is measured in kilovolt-amperes (kVA).

The DNO reserves that level of network capacity for the property. For applicable supplies, it appears as a daily capacity charge within the non-commodity costs on your electricity bill.

The key point is that the capacity charge is based on the capacity reserved, not on how much of it the building routinely uses.

How much excess capacity could be costing you?

Consider a commercial building with an agreed supply capacity of 1,050 kVA and an illustrative capacity charge of 9.92p per kVA per day.

Reducing the agreed capacity from 1,050 kVA to 300 kVA would cut the annual capacity charge by around £27,156. The building has not reduced its electricity consumption by a single kilowatt-hour. It has simply stopped paying for network capacity it no longer needs.

Why do buildings end up with excess electricity capacity?

There are plenty of legitimate reasons a building's agreed capacity may sit well above its current maximum demand:

• A previous occupier needed substantially more power.

• The building once operated for a completely different purpose.

• Industrial or other high-load equipment has been removed.

• Occupancy or operating hours have fallen.

• Energy-efficiency projects have reduced demand.

• On-site generation has changed the building's grid requirements.

• Extra capacity was secured for a development or expansion that never happened.

Commercial properties don't stand still, and neither do their electricity requirements. Agreed capacity should not be a figure that is set once and forgotten.

Don't simply reduce capacity to today's peak

If a building currently peaks at around 300 kVA, that does not mean its capacity should drop to 300 kVA. Before you reduce agreed supply capacity, consider:

• Historic half-hourly maximum demand and seasonal peaks.

• Unusual or exceptional operating periods.

• Planned changes in occupancy or building use.

• Refurbishment or redevelopment.

• New tenants and their likely demand.

• Heat pumps and wider electrification.

• Electric vehicle (EV) charging.

• Battery or renewable projects.

• An appropriate level of operational headroom.

Set it too low and you risk two costs. Exceeding your agreed capacity can result in excess capacity charges under the applicable network charging arrangements. And once capacity has been surrendered, reinstating it may require a fresh DNO assessment and, depending on the local network, additional works and cost.

When should you review your agreed supply capacity?

This matters most for commercial property portfolios. A hotel, office, retail or industrial asset can change significantly over its life. A refurbishment may remove one load while adding another, and a new tenant may operate completely differently from the last.

• We recommend reviewing capacity periodically, and especially when:

• A property changes use.

• A major tenant changes.

• Significant electrical equipment is installed or removed.

• A refurbishment takes place.

• Electrification projects are planned.

• Historic maximum demand is consistently well below the agreed level.

Capacity reviews should be part of good energy procurement oversight, not something noticed only when someone questions a line on an invoice.

How to check if you are paying for too much capacity

1. Find your agreed capacity. It is shown on your electricity bill or in your DNO connection agreement.

2. Compare it with actual maximum demand. Use half-hourly consumption and demand data to see how the property has behaved across seasons and operating conditions.

3. Assess the gap. Is it genuine headroom the building is likely to need, or capacity you are simply paying to reserve?

4. Plan for the future. Factor in tenants, electrification, EV charging and on-site generation.

5. Speak to your DNO. If the gap is significant, ask whether your Maximum Import Capacity can be reduced.

This is also where energy invoice validation adds value beyond bill accuracy. An invoice shouldn't only be checked to confirm the supplier has calculated it correctly. Sometimes the more valuable question is whether the underlying charge still makes commercial sense.

Not every energy saving comes from using less energy

Good energy procurement isn't only about negotiating a better unit rate. It's about understanding the full cost structure behind your electricity contract, including non-commodity costs such as capacity charges.

For some buildings, there will be nothing to change: the existing capacity is appropriate and provides valuable headroom. For others, particularly properties that have changed considerably since the connection was set up, there may be a material amount of unused capacity sitting quietly on the bill.

Sometimes the opportunity isn't using less electricity. It's simply stopping paying for capacity you no longer need.