Transmission Network Use of System (TNUoS) Updates

TNUoS charges are fees paid by electricity suppliers and generators to help run, maintain, and grow the UK’s electricity transmission network.

The National Energy System Operator (NESO) has released its latest five-year forecast for TNUoS charges. From April 2026, these fees are forecast to rise sharply, which could significantly increase costs for all consumers.

Key points from the report:

1. Allowed Revenue

• What it is: The total amount NESO is permitted to recover from network users to fund the transmission system. This covers building, operating, and maintaining the high-voltage network across Great Britain.
• Why it matters: It sets the overall “pot” of money that TNUoS charges aim to collect. The sharp rise (from £5.1bn to £13.6bn by 2030/31) reflects:
  • Major grid reinforcement for renewables in remote areas.
  • Higher investment allowances under Ofgem’s price control.
  • Inflation and cost of new infrastructure for net zero.

2. Demand Residual (TDR)

• • What it is: A non-locational charge applied to demand users (homes and businesses) to recover the remaining revenue after locational charges. It’s now the largest component of TNUoS for most customers.
  • Impact: Rising from £3.8bn to £11.75bn means standing charges will almost double in 2026/27 and keep climbing. Cutting consumption won’t reduce this part of your bill.
  • Additional Note: The agreed capacity of a site affects its TCR banding, which determines standing charges. This is why high-capacity sites may see significant cost increases under TDR rather than under the Half-Hourly tariff.

3. Half-Hourly (HH) Demand Tariff

• • What it is: Applies to sites with half-hourly metering (typically large businesses). Although the tariff is expressed in £/kW, charges are based on actual consumption (kWh) during the three triad periods. For customers, this cost is included in the unit rates of their tariff.
  • Impact: It’s more important to reduce your energy use during the three peak periods (called triads) than to worry about your agreed capacity, because this charge is based on what you actually use at those times.

4. Non-Half-Hourly (NHH) Tariff

• • What it is: Applies to smaller sites (domestic or small business) without HH metering. Charged per kWh, during peak periods (4–7 pm).
  • Forecast:43p/kWh in 2026/27 → 0.68p/kWh by 2030/31.
  • Impact: While this looks small, it adds up for high-consumption users and is layered on top of other network and energy costs

These charges are controlled by Ofgem through price regulations.

The UK is moving to a low-carbon energy system, which needs big investments in the transmission network. Ofgem’s framework allows higher revenue to fund these upgrades. More renewable energy in remote areas also means longer transmission distances, which adds cost.

TNUoS charges are a big part of your energy bill. With these increases coming, it’s important to review your energy strategy now.

Your site’s location and capacity affect how much you pay. By checking your energy budget, forecasts, and procurement plans early, you can prepare and look for ways to reduce the impact.

We have written to Ed Miliband and other key stakeholders at the Department for Energy Security and Net Zero (DESNZ) about the effect of rising TNUoS charges on small and microbusinesses.

From April 2026, supplier costs will rise by £2.7bn, which could mean an average 8% increase in energy bills for our customers. Many small businesses already face financial pressure and have little control over fixed charges, which are set to double.

We’re asking the UK Government to consider options like phased increases, alternative cost recovery, and better alignment with renewable policies to protect small businesses and economic growth.

You can read our letter here.

The 2025/26 charging year remains unchanged. However, the big changes will begin in 2026/27.

Key dates:

• 30 November 2025: Draft tariffs published: Initial figures will be released, providing early visibility into expected changes.
• 31 January 2026: Final tariffs published: Confirmed rates will be made available following stakeholder feedback and regulatory review.
• 1 April 2026: New charges go live: The updated tariffs will be implemented and take effect.

Ofgem’s final decision (expected late 2025) may lead to slight changes in the published tariffs, but the overall direction is clear.

If you want to find out more about the updates or support information on NESO’s five-year forecast, you can click here.