The cost of this work is recovered through Transmission Network Use of System, or TNUoS, which appears on business energy bills. From April 2026, many businesses will see TNUoS rates rise by up to 60% year on year. This translates into an estimated 5 to 15% increase on an average business electricity bill.
As of 7th April 2026, some suppliers are still reviewing the updated TNUoS tariffs and considering how to apply these changes within their pricing. Approaches will vary. Some suppliers are passing the increase through to existing contracts, which means certain businesses may see an uplift in their charges. Others anticipated the change much earlier and built additional allowances into their pricing models, which reduces or removes the need to adjust current agreements.
Once suppliers complete their reviews they will publish clearer guidance directly to their business customer base.
What is TNUoS, and why is it increasing?
TNUoS is the fee that pays for the high‑voltage transmission network that moves electricity from generators to the local distribution networks and directly connected sites. It funds transmission owners’ investment, operations, and maintenance, and it is a core part of the UK electricity market arrangements.
The National Energy System Operator (NESO) sets TNUoS tariffs each year. For 2026 to 2027, NESO’s latest view is a sharp increase in system TNUoS charges, reflecting higher allowed revenues for transmission owners under Ofgem’s RIIO‑ET3 price control.
Total TNUoS revenue will rise from around £5.1 billion in 2025 to 2026 to about £8.9 billion in 2026 to 2027, with further increases expected toward £13.6 billion by 2030 to 2031. These increases fund major upgrades that support the connection of new low carbon generation, reduce reliance on constraints, and improve resilience across the electricity grid.
The final tariffs published in February 2026 confirm that this increase in allowed revenue will translate into a year-on-year rise of up to 60% in TNUoS charges for businesses.
The chart below compares Ofgem’s Draft and Final Determinations for transmission price control revenue under RIIO‑ET3. It shows that allowed revenue for transmission owners rises sharply from around £4 billion in 2025/26 to over £10 billion by 2030/31. This increase in allowed revenue under RIIO‑ET3 is the main driver behind higher TNUoS charges.
Source: Drax
To help show the scale of the increase, another chart below from Drax compares the 2026 to 2027 residual tariffs with those from 2025 to 2026. These figures are based on Ofgem’s price control process.
In short, Ofgem first publishes Draft Determinations, which are early estimates of how much money the transmission companies might be allowed to recover to run and upgrade the grid. After reviewing feedback, Ofgem then publishes Final Determinations, which confirm the actual amount they can collect.
This total is called the price control revenue. For the 2026 to 2031 period, Ofgem’s Final Determinations set this at £46.2 billion, which is £2.6 billion less than the £48.8 billion originally suggested in the Draft Determinations. Because residual tariffs make up more than 90% of most organisations’ TNUoS costs, businesses will face higher standing charges from April 2026 even if their electricity use stays the same.
Source: Drax
Residual charges are set to rise by 28% to 116% depending on the banding shown in the chart. The bars highlight the new 2026 to 2027 charges, while the blue dots show how much they have increased since last year, with the steepest rises for larger sites.
LV and HV refer to low voltage and high voltage connections. Bigger industrial sites usually connect at higher voltages, which places them in higher TNUoS bands and results in higher standing charges.
Banding is based on a site’s agreed capacity rather than how much electricity it actually uses. If the capacity is higher than required, the site can fall into a more expensive band. This makes it important for businesses, particularly those on pass through contracts, to review both well before April 2026.
Be the First to Know About New TNUoS Changes
How TNUoS charges are calculated
For generators, charges are mainly generation tariffs based on Transmission Entry Capacity and location. Since the Targeted Charging Review reforms, a large share of TNUoS is recovered through a daily standing charge linked to a site’s banding, with a smaller residual element varying by region. In practice, that means many businesses will see the increase as a higher fixed cost per meter, regardless of consumption.
Key features to remember:
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NESO has published final tariffs at the beginning of February 2026, with new charges taking effect from 1 April.
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Regional differences apply. Sites further from large generation hubs can face higher locational tariffs.
- Contract structure matters. Pass‑through contracts expose you to in‑year changes when final tariffs are published, while fixed contracts may still be affected if suppliers have under‑forecast TNUoS.
Who will feel the impact most?
While all business electricity users will be affected, some sectors will see larger percentage changes in their bills:
- Data centres, manufacturers, logistics, and other high‑load operations with half hourly metering and large site capacities.
- Multi‑site portfolios with meters in South Wales, South West, and South East England, where regional charges are expected to increase more steeply.
- Businesses on pass‑through arrangements for use of system TNUoS.
- 03 and 04 meter sites will move to half‑hourly metering, which may change their category. These businesses should make sure their metering details are up to date.
In a recent analysis of large portfolios, the lowest average increase per meter was about £17,000, the highest averaged £82,500, and the largest individual site increase exceeded £300,000. Even small businesses should plan carefully, since the proportional impact on operating budgets can be material.
In addition to higher standing charges, half-hourly demand tariffs for 2026 to 2027 show a varied picture across the UK. The chart below, sourced from Drax, compares the absolute HH tariff per kilowatt with the percentage change from 2025 to 2026.
Source: Drax
What this means for businesses:
- The South West region stands out with both the highest tariff and the largest percentage increase.
- Areas such as the South East, London, and South Wales also experience notable year on year rises.
- Regions in the North may see minimal impact, due largely to proximity to generation.
- For multi-site portfolios, this creates uneven cost impacts where location drives a significant proportion of exposure.
These regions are likely to see bigger increases because they rely more on electricity being transported in from other parts of the country. Areas that are further from major generation hubs need more network reinforcement to move power over long distances, and that extra infrastructure cost is reflected in higher TNUoS charges, particularly in the South and South West.
What NESO’s latest forecast means for timelines
- February 2026: Final TNUoS tariffs published.
- April 2026: New TNUoS charges set to go live.
Align budget cycles, board updates, and procurement decisions around these milestones so there are no surprises when charges land.
Practical steps to manage risk and cost
1) Review your contracts and banding
- Confirm your TNUoS. This can be reviewed within your supplier agreement, alternatively you may have already heard from your supplier about updated costs.
- Check your TCR band and site capacity. If your banding exceeds actual usage, you could be charged based on a higher tier than necessary.
- If your contract runs past April 2026, build in contingency for TNUoS increases and clarify how your supplier will reconcile differences between forecast and final tariffs.
2) Improve energy efficiency and demand management
- Reducing consumption directly lowers exposure to volumetric elements and helps offset the rise in fixed network costs.
- Use smart metering, analytics, and demand‑side response to flatten peaks.
- Undertake a targeted audit to prioritise fast‑payback measures across lighting, HVAC, motors, and process controls.
3) Portfolio‑level risk management
- Model system TNUoS charges under different NESO forecasts.
- Consider locational strategy for new sites or expansions, particularly for energy‑intensive operations.
- Work with energy consultants or energy experts to align procurement, flexibility, and investment options into a single plan.
4) Explore on‑site and embedded generation
- Where appropriate, assess the commercial case for embedded generators behind the meter to optimise both demand and export.
- Solar PV and storage can reduce reliance on the grid, trim exposure to network use of system charges at peak times, and provide resilience. Speak to our team today to explore tailored solar solutions for your business.
What this means for bills in 2026 and beyond
Ofgem’s Final Determinations for RIIO‑ET3 indicate a substantial step‑up in allowed revenue for transmission owners, resulting in higher TNUoS from April 2026. Early signals suggest the rise will be significant but slightly lower than feared under earlier projections.
Ofgem’s analysis points to higher standing charges for households and a 5 to 10 percent increase in business electricity costs in 2026 to 2027, though improvements to the system should drive efficient operation and reduce other cost elements, such as constraint and balancing, later in the decade. Businesses should prepare for TNUoS increases in the short term, and build a resilient strategy that benefits from a stronger electricity grid over time.
Why work with our team
This charge is coming and will impact all businesses, if not now then it will on the future contracts for the business. If ever there was a time to locate further savings to try and balance out any increases, it is now. We highly recommend undertaking a full KVA/ Capacity review. If you are using less energy than expected then there could be significant forward savings to be made on future contracts. Our energy consultants can also help clients understand exposure, evaluate tailored solutions such as on‑site generation and demand flexibility, to support in building a plan to scale a low carbon future with confidence.
Speak with our teamImportant: What to expect from suppliers
Not all Energy suppliers have confirmed how they will incorporate the uplift in TNUoS charges into existing contracts. Approaches are likely to vary between suppliers and contract types, particularly where forecasts were set before NESO’s latest revenue outlook. Your supplier will be in contact with you directly if contractual changes are being applied.
If you have not heard from your supplier, we recommend speaking to their customer services department who will have access to your records. They will also be able to provide you with any update to your contract.
Potential Scenarios You Might Be Facing
Some suppliers have simply chosen not to pass the uplift through to customers at this stage. Every supplier has its own approach to handling industry charge changes, and in some cases they may decide to hold prices steady during the current contract period.
If your supplier has told you they are absorbing the increase, your bills should remain unchanged for now. It is important to note, however, that prices for all new contracts already include the updated TNUoS charges, so the impact may be reflected when you come to renew.
If anything in the communication you have received is unclear, it is always best to get confirmation directly from your supplier.
If you are on a pass through or partially pass through agreement, your contract already sets out that certain industry charges, including TNUoS, can change during the contract term once final tariffs are confirmed.
You will usually see this as a higher standing charge. Some suppliers will show the change as a percentage rise to make the impact clearer.
Your best next step is to read the cost breakdown they have provided. If anything looks unusual, contact the supplier directly. This is a national charge, so it is unfortunately not something you can opt out of.
Not all suppliers adjust live contracts. A few prefer to keep prices the same until the contract ends, then incorporate the new transmission charges into your renewal pricing. This means that your bills might stay stable for the rest of your current contract.
At renewal, you should expect to see higher standing charges due to the scale of the national uplift. If this is approaching, it may be worth reviewing your capacity levels and any energy efficiency opportunities to soften the impact of those future increases.
Silence does not necessarily mean nothing is happening. Many suppliers are still working through their internal pricing reviews, and some will not send updates until everything is signed off.
You may experience a short period of uncertainty before they confirm their position.
The best thing you can do is keep an eye on your inbox and, if you are uneasy about the lack of information, contact your supplier directly. Any changes will come from them, as this uplift sits outside our control.
Even on fixed contracts, some charges are treated differently. While your unit rates may be fixed, your contract may still allow for changes to specific industry costs, such as TNUoS, if they move materially after prices were set.
In this situation, the supplier is not repricing the whole contract. Instead, they are adjusting the element linked to transmission network charges to reflect the updated national tariffs taking effect from April 2026.
If you’ve been notified of an increase, it’s worth checking exactly what part of the bill is changing and how it has been calculated. Your supplier should be able to explain how this aligns with your contract terms.
Frequently Asked Questions
The Transmission Network Use of System charge that funds the build, operation, and maintenance of the high‑voltage transmission network across Great Britain.
NESO sets tariffs annually, normally publishing final tariffs by late January for application from 1 April. For demand customers, much of the charge now appears as a daily standing charge linked to site banding, with regional elements reflecting location.
No, but you can manage the cost through risk management, energy efficiency, contract structure, and on‑site or embedded solutions that lower grid exposure and improve resilience.
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