The UK energy industry is undergoing significant transformation, driven by the push toward decarbonisation, increased electrification, and the need for a more flexible grid. Alongside these structural changes, the way costs are allocated across the system is evolving.
Three key developments are reshaping how the industry operates and how costs are ultimately passed on to consumers: rising Transmission Network Use of System (TNUoS) charges, the introduction of the Nuclear Regulated Asset Base (RAB) levy, and Market-Wide Half Hourly Settlement (MHHS). You can read about the Nuclear RAB Levy and MHHS here.
Rising Transmission Network Use of System (TNUoS) Charges
What?
TNUoS charges recover the cost of building, maintaining, and operating the high-voltage transmission network.
Why?
Transmission costs have risen significantly in recent years, leading to changes in the way TNUoS charges are levied. This is largely due to substantial investment in grid infrastructure needed to connect renewable generation, particularly offshore wind, and reinforce the network. You can read more about the projected tariff increases for 2026 here.
Impact?
The impact of TNUoS increases is not uniform and varies widely depending on several factors including size and energy usage, location, type of market participant (generators, supplier or consumer) and ability to manage demand. This uneven impact is one reason why TNUoS reform remains an ongoing topic of debate within the UK energy sector. You can read more about how network charges affect standing charges in our blog on TCR.
Issues?
While essential for achieving net-zero targets, these increases are creating volatility and a growing concern for generators and suppliers alike. For generators, particularly those in regions with high transmission costs, rising TNUoS can materially impact project economics and investment decisions.
The energy landscape is changing. If you want to understand what that means for your business, we’re here to help. Get in touch with the team today.
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