TNUoS Residual Charges Set to Double in 2026
From 1 April 2026, a major shift in the way electricity network costs are recovered will hit UK businesses. Transmission Network Use of System (TNUoS) residual charges, the fixed per-site element of network costs recovered through the standing charge, are set to almost double in a single year.
According to the National Energy System Operator’s (NESO) latest Five-Year View, TNUoS demand residual revenue will rise from £3.84bn in 2025/26 to £7.52bn in 2026/27. By the end of the decade, that figure is expected to reach £11.75bn.
Unlike unit rates, these charges are levied per meter, per day. That means cutting consumption will not reduce exposure. All businesses will see the impact directly in their standing charges.
Why costs are rising
This is not just another incremental cost adjustment. The 2026 change marks the beginning of the RIIO-ET3 price control period, a regulatory framework that sets allowed revenues for Transmission Operators.
Over the next five years, the grid requires around £80bn of investment to connect new renewable generation, reinforce the network, and move power from where it is produced to where it is consumed. Offshore wind in the North Sea, Scottish renewables, and large-scale solar projects all demand significant reinforcement to reach demand centres in the South and Midlands.
In short, businesses are paying for the infrastructure needed to deliver the UK’s net zero future.
How this will affect businesses
Standing charges and pass-through contracts
For most businesses, the increase will appear in standing charges. Many contracts treat TNUoS as a pass-through cost. That means even if you have signed a “fixed” deal, your supplier can pass on updated standing charges mid-contract from April 2026.
Banding thresholds
Residual charges are applied based on connection voltage and agreed capacity. Thresholds were set during Ofgem’s Targeted Charging Review (TCR) and are locked in for the RIIO-ET3 period. Businesses on the cusp of a higher band could see significantly larger increases.
Regional differences
Not all businesses will face the same additional exposure. Alongside the residual charges, the locational element of TNUoS is also forecast to rise. The below rates will be charged against the electricity consumed during the three Half-Hourly peaks known as Triads.
- Southern GB: average £3.22/kWh in 2026/27, increasing to £5.12/kWh by 2030/31
- Northern GB: remains close to £0/kWh on average, reflecting generation surplus in that region
The numbers at a glance
By the end of the decade, the vast majority of TNUoS recovery will come through standing charges rather than usage-based tariffs.
- Total TNUoS revenue: £8.9bn (2026/27) going to £13.6bn (2030/31)
- Residual (standing charge) revenue: £7.52bn (2026/27) going to £11.75bn (2030/31)
- Half-hourly demand tariffs (anticipated revenue): £1.38bn (2026/27) going to £1.85bn (2030/31)
The scale of impact: HV and EHV examples
The effect of these changes becomes clear when looking at the High Voltage (HV) and Extra High Voltage (EHV) TCR bands. These tariffs apply per site per day across the year, which means even small increases translate into significant annual costs.
For example, a HV3 site will see annual TNUoS residual charges increase from around £85,000 in 2026/27 to more than £144,000 by 2030/31. At the very top end, EHV4 sites face costs rising from £2.4 million to over £4.1 million a year across the same period.
A full breakdown can be found here.
Timeline of change
It’s important to note: the 2025/26 charging year is unaffected. The step change begins with 2026/27.
- 30 November 2025: Draft tariffs published
- 31 January 2026: Final tariffs published
- 1 April 2026: Charges go live
Ofgem’s final determinations for RIIO-ET3, due Q4 2025, could still shift the numbers slightly, but the direction of travel is clear.
What businesses should do now
- Budget and forecast
Model your energy costs for 2026/27 onwards using NESO’s latest forecast. Build in scenarios to test resilience against further increases through to 2030/31.
- Check contract terms
Review whether TNUoS residuals are fixed or pass-through in your current supply contract. Understand if April 2026 changes will affect you mid-term.
- Review your banding
Check your inputs: agreed capacity (kVA) and connection voltage. If your site is misclassified or changes are planned, you could be exposed to a higher band unnecessarily.
- Explore demand flexibility
While residuals cannot be avoided, the locational demand element can still be influenced by reducing demand at key times or investing in on-site flexibility.
- Investigate reliefs
Some businesses may qualify for sector-specific support or relief. While these do not remove TNUoS charges, they can help reduce overall exposure. It is important to review your eligibility and ensure you are not missing out on opportunities that could ease the impact of rising costs.
Final thoughts
The 2026/27 charging year marks one of the most significant shifts in electricity network costs for a decade. With standing charges set to double almost overnight, businesses cannot afford to wait until April 2026 to react.
By understanding the forecasts, reviewing contracts, validating banding, and planning ahead, businesses can avoid being caught off guard. For more information and support contact enquiries@businesswisesolutions.co.uk.
