The UK energy market is seldom static, but the latest revision to TNUoS tariffs for 2026/27 marks one of the most significant changes in transmission expenses we have seen in years. After the National Energy System Operator (NESO) announced the final tariffs on January 30, 2026, companies nationwide are justifiably inquiring: How will this affect my energy expenses?
At E For Energy, we are presently conducting a comprehensive analysis of these validated charges to assess their impact on current customers and future rates. While the analysis continues, this article seeks to clarify the reasons for the increase, its significance, and why adopting a thoughtful approach at this moment benefits everyone involved.
TNUoS or Transmission Network Use Of System (charges) refers to the cost for using the high voltage transmission network in the UK. The transmission network is the physical way through which you move electricity from where it is generated to the electricity supplier’s local distribution networks. The local distribution networks then provide power to the home or business. TNUoS is charged to electricity suppliers and is a charge that cannot be negotiated away by the supplier with their customers. This charge is calculated centrally, across the industry, and is normally a considerable element of the total cost of using electricity for a business with multiple facilities and high demand.
When changes are made to TNUoS tariffs, the changes impact all suppliers and sectors, and ultimately impact UK energy prices in 2026 and the future.
The rise in UK transmission fees for 2026/27 hasn’t emerged unexpectedly. It stems from multiple enduring, structural alterations occurring throughout the electricity framework.
The UK’s shift to Net Zero necessitates major improvements to the transmission network. Emerging renewable energy sources, offshore wind integrations, and increased electrification of transportation and heating systems all exert extra pressure on infrastructure that was not built to handle such complexity or demand.
Enhancing and enlarging the grid requires funding, and TNUoS fees are a key method for recouping those expenses.
New price control period RIIO ET3
One of the main reasons for the recent rise in charges is due to the introduction of the RIIO-ET3 price control for 2026/27 to 2031. Under this new RIIO ET3 price control, the allowed revenue for Transmission Operators will rise from £5.1bn in 2025/26 to £7.61bn in 2026/27. The corresponding increase in allowed revenue will be passed directly through to all customers as an increase to their Transmission Network Use of System (TNUoS) charges, regardless of the supplier.
Demand residual charges
Another major driver is the large increase in demand for residual charges in the UK. Demand residual charges are fixed charges that recover a significant percentage of total transmission costs (the majority) and have, for many businesses, now become the dominant portion of their TNUoS exposure. They are fixed charges that do not change with how much electricity you are using at any point in time, and they create a disconnect with most consumers; however, they are at the core of how the charging framework currently operates.
Revised charging bands
Updated charging band limits are causing additional sites to fall into more expensive categories. Certain businesses might experience increases even if their real energy consumption hasn’t varied much, solely due to their new position in the charging framework.
A long-term upward trend, not a one-off
It is important to mention that although the ultimate NESO TNUoS tariffs for 2026/27 were slightly reduced from initial draft projections, the overall trajectory remains consistent.
Forecasts indicate a total rise of approximately 69% throughout the five-year span from 2026/27 to 2030/31. This marks an unprecedented increase in electricity transmission costs in the UK. An excellent strategy that businesses should consider when thinking about future energy planning and conservation.
The short-term view is that TNUoS charges will put upward pressure on the price of delivered electricity. Longer term, it is less clear-cut than that.
As transmission charges are outside of the supplier’s control, any increase to be able to pass on those costs to customers will need to be properly assessed and correctly accounted for in the price. If they are built into the price too early and are based on an uncertain forecast, then there is a risk of creating a price that does not fully reflect true costs.
Earlier on in the process, the draft tariffs produced by NESO were much higher than initially expected. It was therefore decided not to include these draft levels in the pricing at this stage. This was to avoid potentially overinflating prices for customers.
With the final tariffs for TNUoS in 2026 now having been agreed, there is now a much more solid basis for analysis. Nevertheless, because of the level of change, it is crucial to take the time to fully understand the implications before any pricing changes can be made.
Because of the rapidity of change in many markets, organisations may sometimes be tempted to create and implement changes immediately upon receiving new information. In the case of transmission charges, however, although timely updates are critical, they must also be accurate.
Confirmed tariff rates give organisations the necessary information to conduct a thorough analysis of how costs will flow through to each customer site/performance contract. Currently, we are in the process of reviewing and comparing the costs of previous customers to the costs for future pricing methodologies for alignment with actual costs, instead of relying on worst-case projections.
This methodology will help to eliminate future rework, while ensuring that changes are durable, justified, and equitable when they are made.
We want to provide our customers and broker partners with maximum clarity and transparency while the review process is taking place; therefore, we have included a temporary disclaimer located on each of our bespoke quotes. The disclaimer is:-
“The TNUoS (Transmission Network Use of System) tariffs that were published on 30 January 2026, relating to the financial year 2026/2027, have not been absorbed within the prices we have currently been quoting and, therefore, will not be included in any future quotes until such time as fully assessed and incorporated within our pricing structure.”
The reason for this disclaimer is not to create any uncertainty; rather, it is to provide honesty and integrity to our broker partners and customers and create a clear understanding between all parties as to where everyone is during and after we complete the review process.
After the internal review has been conducted, a formal update will be issued regarding:
• TNUoS tariff impacts on pricing changes
• The effects of these pricing changes on existing customers
• The approach for future contracts
The goal is to produce a pricing structure consistent with UK transmission charges confirmed prior & avoid either overestimating costs or creating unnecessary volatility.
The surge in Transmission Network Use of System (TNUoS) fees is a component of a broader, long-term transformation in the funding and operation of the UK’s electricity system. Even though the sums at stake are considerable, implementing a comprehensive, transparent, and well-considered approach will help prevent companies from falling victim to rash choices or exaggerated beliefs.
As is obvious from this read, if you have any queries on how NESO TNUoS Tariffs or wider transmission costs impact your business, it may be useful to speak with someone sooner rather than later about it. Knowing these charges now will have an immediate effect on how you manage energy costs in future years.