UK business electricity bills are going through significant changes, and most of them have nothing to do with how much power you use. Instead, the biggest increases are driven by non-commodity charges: government policy, infrastructure investments, and new levies.
Some projections suggest that UK electricity prices could rise by 20% within the next four to five years, even if wholesale energy prices fall, due to these unavoidable costs rising in the background. These charges affect every UK business, and they’re set to climb significantly in late 2025 and into 2026.
We’re going to explain what these charges are, why they’re increasing, and what you can do to reduce the impact on your bottom line.
What Are Non-Commodity Charges?
When you pay your business electricity bill, you’re not just paying for the energy you use. You’re also paying for the systems, policies, and support schemes that keep the grid running and help shape the UK’s long-term energy future.
These additional costs are referred to as non-commodity charges. They include items such as grid maintenance, environmental levies, capacity schemes, and standing charges. In some cases, these costs are passed down to you from suppliers. In other cases, they’re added directly to your bill. These charges are growing fast. By 2030, even if wholesale electricity costs dropped to zero, your total bill could still match today’s levels, due to policy and infrastructure charges rising in the background.
Over the next 12 to 18 months, a number of new non-commodity costs will be introduced. And unlike your energy usage, these charges apply no matter how efficiently your business operates.
Related Reading: The Clean Power 2030 Plan: What It Means for Your Business
The NRAB Levy: Funding New Nuclear Construction
One of the first new charges to appear on electricity bills is the NRAB levy. This stands for the Nuclear Regulated Asset Base model, a new government-backed financing approach designed to fund the construction of large-scale nuclear power stations such as Sizewell C.
Under the NRAB model, investors receive a steady return while the power station is still under construction. To fund those returns, a new charge will appear on all electricity bills starting on November 1st 2025. This cost-sharing approach aims to reduce the long-term cost of nuclear energy by lowering borrowing risks.
The starting rate will be £3.455 per megawatt-hour (MWh), or £0.345 per kilowatt-hour (kWh). For most businesses, this will be a small but permanent new cost added to their bills.
Note: You may be exempted from paying this levy if your business qualifies as an energy-intensive industry and holds a valid exemption certificate.
How will the NRAB affect my business energy bills?
The NRAB levy may look small at £0.345 per kilowatt-hour, but it adds up, especially for high-usage businesses. It’s not a one-off charge either. It will remain on bills throughout the construction of Sizewell C, resulting in ongoing costs for several years.
Even if wholesale energy prices drop, fixed non-commodity charges like this can keep overall bills high. For SMEs, this makes it even more important to track energy usage and explore ways to reduce business electricity costs over time.
Related Reading: Your Guide to Generating Your Own Business Energy in the UK
The NCC Scheme: Compensating Some, Charging All
The Network Charging Compensation (NCC) scheme is part of a broader government plan to help the UK’s largest manufacturers stay competitive on a global scale.
These energy-intensive industries (EIIs), such as steelworks, chemical plants, and paper mills, consume enormous amounts of electricity daily. That means they face massive grid-related costs just to stay operational.
To keep these industries from moving abroad to countries with cheaper energy and lower environmental standards, the UK government offers them a rebate. Through the NCC scheme, eligible EIIs can get back up to 60% of their electricity network charges.
The catch? That money has to come from somewhere.
Electricity suppliers fund the compensation, but they pass the cost on to all other customers, including SMEs, offices, retail businesses, and hospitality venues, through higher bills.
So even if your business doesn’t qualify for any support, you’re still paying to help fund it.
The Hydrogen Levy: Coming Soon Through the Gas Shipper Obligation
As the UK government seeks to expand its low-carbon hydrogen sector, it has proposed a new levy on gas suppliers known as the Gas Shipper Obligation (GSO). Although this levy targets gas companies, the costs are expected to trickle down to commercial customers through higher electricity bills.
The hydrogen levy UK model is still under consultation, but it is expected to take effect in 2025 or later. Once in place, it will fund revenue guarantees for hydrogen producers, helping to accelerate clean hydrogen production across the country.
Why does this matter to businesses? The total energy bill you receive includes a combination of commodity costs and non-commodity levies. The hydrogen levy, though indirect, may still increase how much you pay, especially if your supplier passes on the full cost.
New UK Hydrogen Levy Explained in Brief
The hydrogen levy in the UK is a planned charge designed to support the country’s clean hydrogen strategy. It will be applied to gas suppliers under the Gas Shipper Obligation (GSO), but the cost is expected to be passed on to businesses through higher electricity bills.
The goal is to fund low-carbon hydrogen production, making the UK a leader in clean energy. But in the short term, this levy could increase non-commodity charges for businesses that already face rising energy costs.
Even though your company may not use hydrogen directly, the hydrogen levy could still affect your business’s electricity bills.
Related Reading: What Is Energy Procurement? A Guide to Cutting Costs and Securing the Best Deals
TNUoS Charges: Higher Standing Charges From 2026
TNUoS stands for Transmission Network Use of System. These charges cover the cost of transmitting electricity around the UK and are applied as standing charges, meaning you pay them daily, regardless of the amount of electricity you use.
From April 2026, the cost of TNUoS charges is expected to nearly double, increasing by £3.68 billion to £7.52 billion in just one year. This rise will affect every UK electricity bill, adding an estimated 5% or more to overall costs.
Because these are fixed charges, improving your energy efficiency will not reduce them. Even businesses that have reduced their consumption will still be required to pay the full amount.
Why are standing charges increasing in 2026?
The short answer is that Ofgem has approved higher allowed revenues for the UK’s electricity transmission operators. This funding helps maintain and upgrade the grid as demand increases and more renewable energy sources come online. The changes fall under the RIIO-ET3 framework and will shape standing charges through to at least 2031.
From April 2026, Transmission Network Use of System (TNUoS) costs are expected to nearly double, rising from £3.84 billion to £7.52 billion in a single year.
What is TNUoS and How Does it Affect Businesses?
TNUoS charges are unavoidable standing costs that reflect the growing investment needed to modernise the UK’s energy grid. If your business has multiple sites, these charges can add up quickly.
What These Charges Mean for Your Business
The four main new or rising charges (NRAB levy, NCC scheme, Gas Shipper Obligation, and TNUoS charges) all share something in common. They apply to every business, regardless of your size, usage, or tariff.
Combined, they represent a clear upward trend in non-commodity charges. Even if wholesale electricity prices fall, your standing charges and policy levies may continue to rise.
This is why understanding the UK energy bill forecast for the next five years is critical. It’s also why it’s important to plan your energy strategy now, not after the costs show up on your bill.
How to Prepare for Electricity Price Changes in 2026
Although you can’t avoid these new charges altogether, there are ways to limit their impact and future-proof your energy setup.
Revisit Your Contracts
Take a close look at your current energy contracts. Some may offer better terms on standing charges or allow more flexible pricing structures. If your fixed-term contract is ending soon, it may be a good time to negotiate or switch to a supplier offering more tailored support.
Forecast Future Costs
Build these upcoming changes into your energy budget. That includes the NRAB levy, higher TNUoS charges, and the potential hydrogen levy. Modelling your energy spend now will help avoid nasty surprises in 2026 and beyond.
Lower Energy Demand Where You Can
Start with the low-hanging fruit: lighting upgrades, HVAC efficiency, and equipment settings. Small improvements across the business can add up to a meaningful drop in your monthly usage (and your bill).
Consider On-Site Generation
Prioritise Energy Independence. While on-site solar panels or battery storage won’t remove fixed standing charges, they dramatically reduce the amount of power you buy from the grid. This strategy protects your business from future commodity price volatility and, more importantly, insulates your business against the rising cost of future non-commodity levies.
Get Paid to Use Less
Some UK flexibility schemes pay businesses to reduce their usage during peak demand hours. Participating in these grid balancing services can help offset rising non-commodity charges while supporting the wider energy system.
Remember, a strategic approach now can help you reduce business electricity costs later.
Clarity Over Complexity
The energy market is becoming more complex, not less. More levies and funding models will likely be introduced as we move toward a net-zero future.
While these changes may be hard to follow, understanding them is the first step to managing them. From the NRAB levy to TNUoS charges, these policies affect every business, but they don’t have to catch you by surprise.
If you’re unsure how these changes will impact your business, we’re here to help.
The UK already pays over £20 billion a year in energy policy costs, and that figure is expected to increase. This is contributing to some of the highest industrial electricity prices in the world.
From electricity levies to rising standing charges, understanding the full picture can be difficult. At Renew & Sustain, we specialise in helping UK businesses manage energy costs and plan with confidence.
We keep up with government policy shifts, regulatory changes, and long-term forecasts, so you don’t have to.
Whether you need advice on procurement, support with compliance, or a tailored energy strategy, our team is here to guide you. Let’s explore what these changes mean for your business and how we can help you reduce costs in the long term. No pressure, just practical support from people who understand energy.
Article Sources
- Ofgem. “RIIO-3 Draft Determinations for the Electricity Transmission, Gas Distribution and Gas Transmission sectors.” July 1st, 2025
- Gov.uk. “Sizewell C: Regulated Asset Base (RAB)”. September 9th, 2025
- ELEXON. “Network Charging Compensation Scheme.” Accessed October 17th, 2025
- Low Carbon Contracts Company. “Gas Shipper Obligation” Accessed October 17th, 2025
- Energy Advice Hub. “TNUoS charges set to rise higher than previously forecast.” September 10th, 2025
