Standing Charges and Non-Commodity Costs: Breaking Down the 2026 Business Energy Bill

This due to something on your business energy bill called non-commodity costs, and include network charges, environmental schemes, balancing costs, taxes and supplier margins. They are mostly fixed or unavoidable, no matter how efficiently you operate. However, it is possible to lower total consumption and mitigate the impact of these costs on your bill by prioritising energy efficiency.

Below is the breakdown for a typical small business customer in 2025 to 2026, based on Drax Autumn 2025 figures converted to pounds per megawatt hour at the meter.

Cost Breakdown (2025-26)

Note: Not all of the non-commodity costs listed in the table above are collected through the supplier’s standing charge. Many like TNUoS, DUoS, BSUoS, Capacity Market, CfDs, and the Nuclear RAB levy, are usage- or site-based charges that appear on the bill separately. The standing charge is just the small daily fee suppliers use to recover part of these costs.

Key point: Only about 36 pence in every pound of your electricity bill pays for the energy itself. The remaining 64 pence covers the infrastructure that delivers it and the policies that shape the UK’s net zero transition.

Why non-commodity costs will rise so sharply in 2026

Transmission charges jump in April 2026

TNUoS costs are expected to jump 94–120% by April 2026. This reflects the need to expand and maintain the national grid, ensuring reliable supply and supporting new energy integration. Ofgem’s RIIO-ET3 price control and NESO’s five-year forecast allow significantly higher revenue for National Grid and onshore transmission operators. The bulk of this increase flows through to the fixed residual charge, effectively boosting the standing charge businesses pay.

Nuclear RAB levy begins December 2025

From 1 December 2025, Sizewell C construction costs will appear on every business electricity bill. The Nuclear RAB levy is a new government-mandated charge/non-commodity cost to fund new nuclear projects. The initial rate is £3.46 per MWh, expected to rise to around £4.50.

Higher rebates for Energy Intensive Industries (EII)

The EII network charge exemption rises from 60 percent to 90 percent in 2026. These exemptions are subject to strict regulation to ensure compliance with government policy. A new scheme known as BICS begins in 2027. Non-EII businesses pay more to cover the increased relief for heavy industry.

Energy Intensive Industries, like steelmakers or cement producers, will see their network charge exemption rise from 60% to 90% in 2026. Most businesses, however, are non-EII and will cover the extra cost of this increased relief, meaning their network charges could rise significantly.

Capacity Market costs continue to climb

Capacity Market charges roughly double between 2025–26 and 2026–27.

Maintaining sufficient capacity is a critical job for the energy sector, ensuring a reliable supply during periods of peak demand.

Standing charges: the cost you pay even when you use nothing

Standing charges aren’t a separate cost on their own. Instead, they’re just one way suppliers collect some of the non-commodity costs listed above. Standing charges aren’t really a separate cost, they’re just how suppliers choose to collect various non-commodity costs listed above. In other words, a standing charge is just one piece of the non-commodity portion of a business electricity bill.

When people think of standing charges, they usually picture the supplier’s daily fixed fee, which is often just 30–80p per day. But for most businesses, that’s no longer the main fixed cost on the bill. The real driver is the TNUoS residual charge, a fee collected per site to cover the cost of maintaining and running the national grid. Actual supplier standing charges can be higher than 30–80p/day, but even at the upper end, they remain a small part of total non-commodity costs, with most fixed costs coming from network and policy charges like TNUoS and DUoS.

This charge is about to skyrocket. For a typical Low Voltage Site Specific customer in Residual Band 2, the annual TNUoS fixed cost looks like this:

That’s more than double in a single year between 2025–26 and 2026–27. By 2031, the fixed cost of just being connected to the grid could hit £9,000 or more. That’s roughly £25 per day, every day of the year, regardless of how much electricity your business actually uses.

Put simply, even if a business barely uses electricity, these costs still land on the bill. They have become the largest unavoidable part of your electricity spend, far outweighing the supplier’s own standing charge.

Installing a smart meter and submitting regular readings can help make sense of your bills, but it won’t stop these fixed charges from eating into your budget. For businesses, understanding and planning for non-commodity costs is now just as important, if not more, than managing your actual energy consumption.

What businesses can realistically do in 2026

You cannot avoid non-commodity costs, but you can reduce your exposure.

• Speak with an energy broker: The energy market is complex, and suppliers are currently using different pricing strategies. Some are building in higher risk premiums to cover anticipated TNUoS increases, while others are quoting lower rates until TNUoS pricing is confirmed. This means that the cost increases could be applied to contracts very soon, even after they are agreed. Working with an experienced broker can help you navigate these options and secure the most suitable contract for your business.
• Check your TCR banding and capacity: Every site is assigned a TNUoS Capacity Registration (TCR) band based on historical or estimated usage. Some businesses may be in a higher band than their actual consumption justifies, meaning they pay more than necessary. By reviewing your banding and correcting it to reflect true usage, you could save thousands on your fixed charges. It’s worth checking with your supplier or a broker to ensure your banding and capacity are accurate.
• Invest in on-site storage: Batteries or solar with battery integration reduce grid imports and can cut DUoS, TNUoS, BSUoS, CCL, and some policy costs.
• Take advantage of exemptions: Energy-intensive businesses should apply for EII certificates or check future eligibility for BICS.
• Work with a broker like Utility Bidder: With fixed charges rising sharply and non-commodity costs making up most of the bill, getting the right contract structure and banding is more important than ever. A broker can help you lock in pricing before increases hit.

The bottom line for 2026

Wholesale prices might look reasonable at around 8–£9 per kWh hour for winter 2025, but the delivered cost tells a different story. Once all fixed and policy charges are added, most businesses are looking at delivered costs of around 24–26p per kWh in 2026–27.

At Utility Bidder, we compare the entire UK business energy market, including every supplier’s approach to pass-through charges, standing charges, and out-of-contract pricing. We break down non-commodity and third-party costs, like delivery infrastructure fees and government levies, so you know exactly what you will pay. No hidden surprises, no confusion.

Get a free, no-obligation business energy comparison today and take control of the 64% of your bill you can’t just switch off.