What’s really driving rising energy network costs?

What’s really driving rising energy network costs?

Why some connections are more exposed to rising costs

Many businesses are used to taking a back seat as market conditions and regulation drive changes in energy costs. But for large electricity users, particularly those with high-voltage (HV) connections, this shift is becoming increasingly difficult to ignore.

In April 2026, the Transmission Network Use of System (TNUoS) charges increased by 64%, and further increases of 23% are anticipated by April 2027 and as much as 167% by 2031 according to NESO.

For businesses with High-voltage connected sites, this poses a significant financial pressure.

In this blog, we’ll explore what makes up your network costs, how they affect your bill, and why these charges are increasing.

What is TNUoS and how does it affect my bill?

TNUoS is a non-commodity charge that contributes to the cost of maintaining and upgrading transmission network infrastructure to support growing electrification technologies, and grid scale generation.

Your charges are determined by factors including your Maximum Import Capacity (MIC), and your connection voltage (e.g. high voltage vs low voltage).

These factors place each site into a charging band, with a fixed £/site/day cost.

For HV-connected sites, the difference between these bands can be significant, often running into tens or even hundreds of thousands of pounds annually, depending on the site.

Critically, these charges are not just linked to how much energy you use, but also to the capacity and structure of your connection.

What’s driving the increase?

Network charges are rising as part of a broader transformation of the UK electricity system.

Ofgem sets pricing controls every five years through the RIIO framework (Revenue = Incentives + Innovation + Outputs), which regulates how network operators invest in infrastructure including physical powerlines and gas pipes.

As we decentralise and move towards more distribution networks with smaller generations like wind, this naturally increases the requirements to transport this electricity to where it’s needed.

These investments are funded through regulated charging mechanisms, primarily:

• DUoS (Distribution Use of System charges)
• TNUoS (Transmission Network Use of System charges)

You can learn more about the difference between TNUoS and DUoS in this blog.

Why is this critical for large energy users?

How your site is connected to the network is becoming just as important as how much energy you use.

This is particularly relevant for HV-connected sites, which are more exposed to changes in network charging, and face significant costs if not actively managed.

Even small inefficiencies in how a site is configured, such as excess contracted capacity, outdated assumptions about demand, or a connection setup that no longer reflects how the site operates, can translate into disproportionately higher costs compared to lower-voltage sites.

In many cases, the way a site was originally designed or connected may no longer reflect how it operates today.

Understanding Maximum Import Capacity (MIC)

One of the most important drivers of network cost is Maximum Import Capacity (MIC).

In simple terms, MIC is the agreed level of power your site is contracted to draw from the grid via your Distribution Network Operator (DNO) or Independent DNO (IDNO).

It is typically set during initial development and considers future expansion plans with additional headroom for real-world application, which is essential.

However, MIC is rarely revisited over time. As operations evolve, efficiencies improve, or site demand changes, the original capacity agreed may no longer reflect actual usage.

Even a relatively small difference can have an impact, and because this sits within how your connection is structured, rather than just what you actively consume, it’s not regularly optimised.

So what can we do about it?

A good starting point is to review your actual peak demand against your contracted capacity (MIC).

This can be done quickly and easily within Stark ID to highlight whether your current setup reflects how your site actually operates today.

• If you’re already using Stark ID, this insight may already be available through your usage data
• If you’re not an existing Stark ID user, or would like support reviewing your portfolio, we’re here to help

Why acting now matters

With network charges continuing to rise, businesses that actively review their position are better placed to manage and reduce future costs, mitigate risk of future increases, and identify opportunities for optimisation.

Summary

In summary, rising network costs are a structural shift that affects all businesses.

Understanding how your connection is set up, and whether your contracted capacity still reflects your actual usage, is a simple but important step in identifying potential inefficiencies and reducing long-term cost exposure, particularly for high voltage sites.

Have you got a high-voltage connection?

If your site is high-voltage connected, but your actual demand no longer requires it, there may be practical ways to reduce cost and improve efficiency.

To find out if this could apply to your portfolio, please speak to our experts.