Upcoming Changes to Non-Commodity Costs: What Your Business Needs to Know

As the energy landscape continues to evolve, non-commodity costs are becoming an increasingly important part of your business’s electricity and gas bills.

These charges, often less understood than wholesale energy prices cover the essential networks, infrastructure, and government schemes that keep energy flowing reliably and sustainably across the UK. With several updates coming into effect soon, we’ve put together a friendly, easy-to-follow overview to help your business stay informed and prepared.

What Are Non-Commodity Costs? (A Quick Refresher)

Non-commodity costs make up more than half of a typical business energy bill and include:

• Network charges – The cost of maintaining and upgrading the national and local electricity networks.
• Industry & system charges – Costs associated with balancing the grid and ensuring reliability.
• Government schemes – Policies supporting renewable generation, energy efficiency, and decarbonisation.

Because these costs are driven by regulation and infrastructure needs, they can change from year to year, sometimes significantly.

Key Changes Coming Up

1. Network Charge Adjustments: DUoS and TNUoS
Electricity network operators are updating their tariffs to support essential investment and maintain a resilient grid.

• DUoS (Distribution Use of System): Covers electricity delivered through your local distribution network.
• TNUoS (Transmission Network Use of System): Covers use of the national high-voltage transmission network.

Both charges are being reshaped regionally to reflect infrastructure upgrades and ongoing system demands.

From April 2026, TNUoS changes under the RIIO-ET3 framework will also shift more recovery into standing charges, leading to different impacts across customer types and regions.

2. BSUoS (often pronounced “BUS-oss”) Changes
BSUoS covers the cost of balancing the electricity system. While fluctuations can still occur due to changes in supply and demand, recent reforms are increasing the predictability of these charges, making cost forecasting slightly more stable for businesses on pass-through contracts.

3. Updates to Government Schemes (RO, FiT & Beyond)
Government schemes such as the Renewables Obligation (RO) and Feed-in Tariff (FiT) continue to receive their standard annual updates, which influence the contributions suppliers must make.

In addition, newer mechanisms – including Contracts for Difference (CfD) and the expanding Energy Intensive Industries Support Levy (ESL) – are playing a growing role in how these costs are distributed across different types of consumers.

4. Capacity Market (CM) Cost Adjustments
The Capacity Market ensures the UK has enough available power to meet peak demand. Costs change annually based on auction results, which determine payments to generators who commit to delivering capacity when needed.

5. Introduction of RAB Nuclear Costs
A new cost line, RAB Nuclear, is being added to help finance future nuclear projects using the Regulated Asset Base model.

This spreads the upfront cost of new nuclear generation across bill payers to support long-term energy security and a low-carbon electricity system. The first elements of this charge began appearing on bills from late 2025.

What Does This Mean for Your Business?

In simple terms, here’s how these updates might affect you:

• You may see changes in your network charges, especially if your operations peak during high-demand periods.
• Your bills may fluctuate more month-to-month if your contract passes through elements like BSUoS.
• Policy-related charges may rise slightly due to updates in government scheme obligations.
• Capacity Market charges may shift, depending on auction results and your demand profile.
• A new RAB Nuclear line may appear on your bill, reflecting investment in future nuclear generation.

Overall, non-commodity costs continue to grow as a proportion of energy bills, so understanding them can support more accurate budgeting and forecasting.

How Your Business Can Prepare

1. Review your contract type: Many pass-through contracts show non-commodity fluctuations directly. Some fixed contracts may also allow adjustments for specific levies.
2. Monitor your usage patterns: Reducing consumption during peak periods may lower exposure to DUoS, TNUoS, and CM-related costs.
3. Plan ahead for variability: Building flexibility into your budget will help avoid surprises.
4. Reach out for help: We can break down your costs, explain your contract implications, or model expected changes.

Non-commodity charges can be complex, but they don’t have to be confusing. If you’d like a personalised review of how these updates may impact your business, just get in touch.

We’re always happy to help.