A new report warns that business electricity standing charges could double by April 2026. This means even if your energy use stays the same, your bills could go up.
The predicted rise is down to an increase in non-commodity costs – specifically the charges energy suppliers pay to use the national grid. While wholesale energy prices have started to settle, this new forecast is a big concern for small business owners.
If you run a small business, understanding these upcoming changes is vital for your long-term budgeting. Here’s what you need to know about the forecast and how it might impact your bottom line.
Why are prices increasing?
The National Energy System Operator (NESO) has released a five-year forecast for Transmission Network Use of System (TNUoS) charges. These are the costs energy suppliers pay to transport electricity from power stations through high-voltage lines to local distribution networks.
To maintain and upgrade the grid – especially to accommodate renewable energy sources like wind farms in Scotland and the North – significant investment is required.
Consequently, the cost of using this system is going up. NESO predicts that the supplier costs will jump from £2.7 billion to £7.5 billion in April 2026 – an increase from the predicted £4.8 billion just four months ago.
What does this mean for business owners?
These network costs are passed down from suppliers to consumers. The forecast suggests that TNUoS charges for suppliers and consumers will approximately double from their current levels – adding around five per cent to electricity bills.
- for domestic households, this could mean an increase from £51 to £93 annually
- for businesses, higher standing charges are expected
Because network charges are typically recovered on a ‘pence per site per day’ basis, suppliers add them to daily standing charges rather than unit rates. This means that your fixed daily costs could rise significantly, even if your:
- energy usage is reduced
- wholesale electricity prices drop
Why is this happening now?
The UK’s energy system is undergoing a massive transformation as it shifts toward a low-carbon future, requiring a grid capable of handling renewable energy.
Transmission companies estimate that around £80 billion will need to be spent over five years to make this happen, including:
- using renewable energy
- reducing reliance on gas generation
- minimising overall system costs in the long run
However, the bill for this investment ultimately lands on the consumer. While the investment aims for a greener, more efficient system, the timing of these cost increases will be challenging for many businesses already managing tight margins.
What can business owners do?
While you can’t control network charges, staying informed can help with budgeting:
- check your contract: understand when your current energy contract ends – if you’re renewing this year, be prepared for potential changes in standing charge structures
- focus on efficiency: while standing charges are fixed, reducing your overall consumption could lower your total bill
- stay updated: keep an eye on news regarding Ofgem’s price decisions
Rising costs are never welcome news. But by understanding the big picture behind these changes, you can better prepare your business for the financial landscape ahead.
Looking for a new energy supplier? Check out our guide to the best small business energy suppliers here.
How-to money and funding guides your business
- How to budget
- How to negotiate with your energy suppliers
- How to access funding and investment
- What is business insurance?
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