The National Energy System Operator (NESO) has published its five-year view of the Transmission Network Use of System (TNUoS) tariffs, which includes news of a steep increase in energy bills from April 2026.
The price increases come at a bad time for UK businesses that are already struggling with high energy bills and other cost pressures (especially those with high energy usage).
But there are steps that energy-intensive industries (EII) can take to shield themselves against the impact of soaring non-commodity costs, such as the TNUoS charges.
In this article, we break down the core reasons behind the dramatic rise in costs, while highlighting how businesses with high energy usage can protect themselves against soaring costs.
What’s happening to TNUoS costs?
Businesses pay TNUoS charges to help fund the UK’s high-voltage electricity grid. Unfortunately, these costs are going to double from April 2026. According to the NESO, the TNUoS Fixed Residual standing charges will jump from £3.84 billion in 2025/26 to £7.52 billion in 2026/27.
TNUoS charges are a type of non-commodity cost. Non-commodity costs are added to the wholesale price of electricity and gas, supporting the delivery of the UK’s renewable energy infrastructure and carbon reduction initiatives.
Businesses tend to focus on their per-kWh unit rates when thinking about cost management. But it’s the all-too-often standing charges (such as TNUoS costs) that are becoming the biggest cost driver here in the UK.
Why are TNUoS costs rising?
Several converging factors are driving the surge in TNUoS costs:
Grid reinforcement for net zero
Major investment is needed to upgrade the UK’s transmission infrastructure to help the grid meet its net zero commitments. TNUoS charges help fund the construction and cabling projects that connect the vast renewable generation from remote locations (such as offshore wind) and safely transport it to demand centres.
RIIO-3 price control period
Ofgem’s RIIO-3 price controls are set to start in April 2026. This is a new regulatory framework that sets the maximum revenue that NESO can recover from consumers over a five-year period.
Ofgem’s targeted charging review (TCR)
Ofgem’s targeted charging review (TCR), has changed how transmission costs are recovered and, unfortunately, this disproportionately hits businesses (especially large energy users). The review has shifted the majority of the TNUoS cost from being variable (i.e., based on peak usage, which could be managed) to being recovered via a fixed daily charge per site.
Supplier under-forecasting
Suppliers have been underestimating network running costs when pricing contracts, so they’re now reconciling these costs by applying higher standing charges for the RIIO-3 period.
The importance of an EII exemption certificate
If your organisation qualifies as an Energy Intensive Industry (EII), you could be eligible for up to 100% exemption on certain non-commodity costs, including compensation to offset up to 90% of the TNUoS.
Holding a valid EII certificate is a no-brainer for businesses with high energy usage. It protects against rising charges, such as TNUoS, now and in the future. It can also help improve the accuracy of your budget forecasting, enhancing your ability to negotiate contracts.
If your EII certificate lapses or is misapplied, your business will be required to pay the full increase in TNUoS charges, which could amount to tens of thousands of pounds (or more) per year.
Your energy supplier may also not apply the correct exception without up-to-date documentation, and any changes to your business structure or energy consumption profile could result in you losing eligibility entirely.
What should energy-intensive businesses do to protect themselves against rising costs?
If you’re a client of Leyton, you don’t need to take any action – we have everything covered.
If you’re not currently working with us, please give us a call. We’ll be happy to check your status and see whether you’re eligible for an exemption.
How Leyton can help
Our team of energy experts are dedicated to helping businesses keep their energy bills down.
We do this by offering:
- A review of your energy bills to see whether there are any tax efficiencies to be made or incentives you can take advantage of
- A fully independent carbon emissions report to help your business identify ways of reducing emissions as well as costs
- A compliance review to ensure that you are not caught out by increased carbon reporting and are meeting all your regulatory requirements
Get in touch to find out more.
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