Avoided TUOS: The Forgotten Revenue Stream for Embedded Generators
By Charles Cattermole published
Avoided TUOS: The Forgotten Revenue Stream for Embedded Generators
Avoided Transmission Use of System (TUOS) payments are a regulated but often missed opportunity for embedded generators. Under NER Clause 5.5(h), DNSPs must pass through the value of reduced transmission charges where local generation lowers their demand on the transmission network.
Despite this, it’s routinely left out of project financial models and almost never factored into real-time optimisation strategies that prioritise arbitrage or FCAS revenue, overlooking local network impacts.
Who’s Eligible?
Any generator connected to the distribution network (battery, solar, gas, or hybrid)may be eligible if:
- They export during TNSP-aligned peak demand periods
- Interval metering is in place
- A formal connection agreement is executed
- Their export demonstrably reduces upstream network demand
Is It Paid Automatically?
Not typically. While some DNSPs like Powercor, TasNetworks, and Ausgrid have defined processes, most require:
- Proactive application and engagement
- Submission of operational data
- Invoicing following annual reconciliation
How Is Value Calculated?
Avoided TUOS is assessed using a “with and without” approach, comparing DNSP charges with and without your export during peak periods (e.g. top 10 demand days or monthly peaks).
For assets ≥500 kW, this can be a meaningful, recurring revenue stream. For smaller systems, the benefit may be diluted unless part of an aggregated fleet.
Why Does It Matter?
Networks don’t need a free lunch and yet many embedded generators are giving them one. Avoided TUOS is low-hanging fruit in the value stack that too often goes unpicked.
If you’re deploying embedded generation, don’t leave avoided TUOS off the table. Build it into your commercial model and optimisation strategy from the start. Early DNSP engagement is key to unlocking it.
