Current energy price volatility shows just how vulnerable the British electricity market is to external shocks. The Government’s Clean Power 2030 agenda is designed to address this, aiming to reduce reliance on fossil fuels and limit exposure to gas-driven price swings by accelerating the rollout of renewable and nuclear generation, alongside the network investment needed to move electricity from where it is produced to where it’s used.
But as this transition unfolds, business energy users must continue to navigate both wholesale price volatility and a shifting, increasingly complex landscape of Non-Commodity Costs (NCCs).
A changing cost landscape
Several upward pressures are building across NCCs. Key drivers include higher Transmission Network Use of System (TNUoS) and Distribution Use of System (DUoS) charges, which fund investment in a safer, more secure grid as it expands to support more renewable generation and wider electrification across the economy. Balancing Services Use of System (BSUoS) charges are also expected to remain high in the near term as the system adapts to higher levels of intermittent generation. Policy costs are adding further pressure. Legacy schemes such as the Renewables Obligation (RO) and Feed-in Tariffs (FiTs) remain in place, while the impact of Contracts for Difference (CfDs) is increasing. New levies also include nuclear funding through the Regulated Asset Base (RAB) model.
Where customers can act now
Against this backdrop, major energy users can materially reduce non-commodity and total electricity costs by deploying a coordinated set of complementary actions.
Time-of-Use becoming more sensitive with MHHS. TNUoS is a fixed annual charge, unaffected by usage, timing, peak demand or load shifting. However, in other areas, we’re seeing a structural shift in the importance of Time-of-Use (ToU). DUoS charges differentiate between red, amber and green periods, with red bands carrying the highest cost. For businesses with operational flexibility, this creates an incentive to move non-essential demand outside peak periods. Even relatively small changes in timing can deliver disproportionate cost savings. This trend is expected to strengthen with the rollout of Market-wide Half-Hourly Settlement (MHHS), giving energy managers clearer insight into when and where energy is used.
Behind-the-Meter: solar and batteries. On-site solar reduces reliance on grid imports, lowering exposure to both wholesale prices and Non-Commodity Charges. Combined with battery storage, it enables businesses to manage peak demand, smooth load profiles and shift consumption away from higher-cost periods. The greatest value is not just in the assets themselves, but in how they are integrated, optimised and aligned with network signals.
Increased focus on energy efficiency. Established energy efficiency measures continue to play a role in reducing overall energy spend and exposure to volume-based charges. Proven approaches include improving the performance of motors, drives and compressed air systems; optimising industrial processes; identifying opportunities for heat recovery; upgrading older, less efficient equipment; and improving monitoring and control with Building energy Management Systems (BMS).
Targeted support through BICS and BIS
The British Industrial Competitiveness Scheme (BICS) provides relief for a widening group of energy-intensive manufacturers, with expanded sector coverage and changes applied retrospectively from April 2026. For qualifying users, BICS removes key policy-driven charges, including the RO, FiTs and Capacity Market (CM), delivering estimated savings of £35–£40/MWh.
For the most electricity-intensive manufacturers, the British Industry Supercharger (BIS) scheme combines similar policy cost relief with substantial network charging compensation. Businesses can only access one scheme, making accurate eligibility assessment critical.
Looking ahead
Clean Power 2030 is intended to reduce reliance on imported fossil fuels and, over time, limit exposure to wholesale price volatility. During this transition, the challenge for energy managers is to understand how costs are structured and how operational and investment decisions can support more effective cost management.