UK business energy costs projections for 2026

UK businesses are bracing themselves for additional costs next year, following two recently announced increases in non-commodity charges.

The National Energy System Operator (NESO) confirmed in early September significant increases in Transmission Network Use of System (TNUoS) charges, which will impact electricity standing charges from April 2026. NESO’s five-year forecast indicated that TNUoS costs – which fund essential grid maintenance and upgrades – are set to rise significantly between 2026/27 and 2030/31 and will be recovered through daily standing charges.

The final rates for next year’s TNUoS charges will only be confirmed in January next year, forecasts show that TNUoS fixed tariffs could almost double for many users from April 2026 as a consequence of increased transmission network investment. Projections indicate that these charges will continue to rise by over 10% per year until the end of the decade.

From 2025/26 onwards, suppliers will be passing through a new non-commodity charge, the Regulated Asset Base charge (RAB). This charge is a government-imposed cost on UK electricity bills, which was introduced to fund the construction of new nuclear power stations. It will be applied to all UK electricity consumers, except those qualifying for an Energy Intensive Industry (EII) exemption. For the period 2025/26 this charge has been set at 0.346p/kWh.

What Can Businesses Do to Mitigate Costs?

Fortunately, despite these cost increases, there is some good news for UK businesses. Commodity costs for energy on wholesale markets are trending near their lowest levels of the year. This follows the successful completion of late summer maintenance at gas facilities in the North Sea, a mild start to autumn, returning nuclear capacity, and the reduction in market risk premiums as a result of the ceasefire in the Middle East. As such, businesses with renewal contracts in early 2026 may benefit from securing their forward energy contracts now to take advantage of these lower commodity costs ahead of the colder winter period.

Businesses looking for budgetary certainty may look to secure a fixed cost contracts, however, for businesses looking to benefit from a flexible trading strategy, there is always the option to enter an aggregated collective procurement strategy via a purchasing basket. Purchasing baskets could offer greater value and strategic purchasing options compared to fixed term supply contracts.

There is further good news for businesses in specific sectors that may be able to apply for exemptions through some of these non-commodity costs. Network Charging Compensation (NCC) looks to rise from 60% to 90% in January 2026. If you are looking to secure your power or gas contracts in 2026 get in touch with the experts at Envantage, who can discuss your options to help you control your energy budget and protect your business from rising costs.

Get in touch directly here.

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• Procurement

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• Energy procurement

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