TNUoS Charges Explained: Why Costs Are Rising From April 2026

December 24, 2025 | Nazia Rajwana | Blog

Contents

What is TNUoS charges and how does it work?
Why are TNUoS charges expected to rise from April 2026?
How large will the TNUoS charges increase by?
Who will be most affected?
Key risks and implications
Preparing for the 2026 TNUoS increase
Engage with Professional Energy Services to Mitigate Costs

According to the National Energy System Operator (NESO)’s latest five year forecast, the UK is facing a sharp rise in Transmission Network Use of System (TNUoS) costs from April 2026, affecting both businesses and consumers. This article explains what’s driving the increase, how significant it may be, who will be most affected, and what actions can be taken to prepare.

What is TNUoS charges and how does it work?

TNUoS is the charge that funds the maintenance and development of the UK’s high-voltage electricity transmission network. It is applied to electricity suppliers (for demand) and generators (for supply) and appears on bills as part of non-commodity charges, typically within the standing charge. Costs vary by region and customer type, reflecting network use and demand on the grid.

TNUoS charges are made up of two main elements. The first is the residual charge, which recovers the fixed costs of maintaining and developing the transmission network and is largely unavoidable. The second is the locational demand charge, which varies by region and reflects how and where electricity is used on the transmission network. Because a significant proportion of TNUoS is recovered through standing charges, overall electricity bills can rise even where consumption remains flat or falls.

Why are TNUoS charges expected to rise from April 2026?

The expected increase from April 2026, the start of the 2026/27 charging year, reflects a combination of higher network investment and changes to how transmission costs are recovered under the new regulatory framework.

Under the upcoming RIIO-T3 (ET3) price control, transmission owners are planning major reinforcement projects to support renewable generation and decarbonisation. This has resulted in significantly higher proposed expenditure compared to the current cycle. At the same time, Ofgem’s updated revenue recovery framework allows transmission owners to recover a greater share of these costs through TNUoS charges.

A key driver of the increase is the Transmission Demand Residual (TDR), the fixed component of TNUoS, which is forecast to almost double year-on-year from £3.8 billion to £7.5 billion. This increase is intensified by the growing use of pass-through arrangements in supplier contracts, meaning many customers will feel the impact immediately rather than at contract renewal.

Additional, further upward pressure may come from pending regulatory code modifications. Changes under the Connection and Use of System Code (CUSC), including proposals such as CMP444, could alter how costs are allocated between generation and demand. While demand-side customers are expected to absorb the majority of the increase, NESO forecasts suggest generation tariffs may remain flat or fall slightly, increasing the overall burden on end users.

How large will the TNUoS charges increase by?

Industry forecasts suggest the following potential increases:

Demand residual (TDR): up to +94% year-on-year.
Allowed revenues: +82% vs 2025/26 (nominal terms).
Standing charges: +70% to +140% depending on meter type and region.
Household impact: +£30 to +£50 on annual electricity bills (Cornwall Insight estimate).

Here are some example increases in standing charges (TNUoS portion only):

NHH Medium band £0.76/day → £1.60/day (£306 extra per year)
HH LV1 (0–80 kVA) £3.91/day → £7.28/day (£1,230 extra per year)
HH LV2 (80–500 kVA) £6.53/day → £14.41/day (£2,876 extra per year)

Who will be most affected?

Although TNUoS increases will be felt across the market, the impact will not be evenly distributed. The shift towards higher fixed and residual charges means certain customer groups will be disproportionately exposed, regardless of overall electricity consumption.

The most affected groups are likely to include:

Businesses with multiple meters or low consumption, where higher standing charges form a larger proportion of total energy costs.
Half-hourly metered customers, particularly those with higher import capacities or exposure to locational charging.
Customers in southern regions, where TNUoS charges have historically been higher due to network congestion and distance from generation.
Customers on pass-through contracts, who are likely to see increases applied immediately from April 2026 rather than at contract renewal.

Future network investment patterns could also shift regional TNUoS differentials over time. As a result, businesses in areas that have traditionally benefited from lower transmission charges may still face material increases.

While households are expected to see annual increases in the region of £30–£50, business customers face significantly higher absolute impacts. This because they can have multiple meters, higher capacity bands and half-hourly charging structures that mean standing charge increases can translate into thousands of pounds per site, particularly for multi-site organisations.

Click below to see how these changes will impact your business

Key risks and implications

The scale and structure of the forecast TNUoS increases introduce several risks for businesses and consumers alike. One of the most immediate challenges is budget uncertainty. Sharp rises in non-commodity costs make forecasting for the 2026/27 financial year more difficult.

As an ever-increasing portion of the energy bill relates to the non-commodity element, the value of traditional energy efficiency measures may also be reduced. While reducing consumption remains important, higher standing charges mean that savings achieved through lower usage may be offset by unavoidable network costs.

Contractual exposure represents a further risk. Some agreements described as “fixed” may still allow for adjustments to TNUoS and other non-commodity charges during the contract term, leaving customers vulnerable to mid-term cost increases. This is particularly relevant where pass-through mechanisms have become more common.

For energy-intensive sectors, rising standing charges may also affect competitiveness, especially where energy costs form a material part of operating expenditure. At the same time, the political and regulatory environment remains uncertain. Significant increases in household and business energy prices could prompt intervention, including temporary caps, smoothing mechanisms or further changes to charging methodologies.

Preparing for the 2026 TNUoS increase

While TNUoS increases cannot be avoided entirely, early preparation can help organisations reduce exposure and improve cost certainty ahead of April 2026. Given the scale of the forecast changes, proactive planning is likely to be more effective than reactive cost control once tariffs are finalised.

Key steps to consider include:

Reviewing existing energy contracts to confirm whether TNUoS charges are fixed or passed through, and to identify any clauses that allow for mid-term adjustments.
Considering the timing of contract renewals, where flexibility exists, to avoid start dates immediately before the April 2026 charging year.
Undertaking scenario planning to assess the financial impact of potential increases of 70%, 100% or more on budgets and forecasts. Use a TNUoS calculator to predict how much your increases could be and plan accordingly.
Monitoring NESO tariff publications, with draft tariffs expected in November 2025 and final tariffs confirmed in January 2026, to understand likely exposure as early as possible.
Managing demand on half-hourly meters, particularly peak demand and capacity settings, to limit exposure to locational charging where applicable.

For multi-site organisations, even relatively small increases in standing charges can compound quickly across portfolios, making early visibility and planning especially important.

Engage with Professional Energy Services to Mitigate Costs

Given the complexity of these upcoming changes and their potential financial impact, engaging with a specialist consultancy such as Professional Energy Services, can help you reduce exposure, improve forecasting accuracy, and identify opportunities for cost recovery.

We provides expert support in energy budgeting, invoice validation, contract negotiation, and compliance management. Our team monitors all regulatory developments, including Ofgem and NESO updates, ensuring that clients are informed and prepared ahead of each tariff cycle.

Through detailed analysis of site-level data, we can help: