What are non-commodity costs on my business energy bills?

Did you know, less than half of your business energy bill pays for the energy you need to power your business?

Non-commodity charges make up around 60% of your business energy bill, according to Energy UK, the trade association for the UK energy industry.

They are hidden in plain sight. You can see them on your bill, but understanding what they actually are is another matter entirely.

While global conflict and supply chain shocks continue to grab headlines and send prices upwards, non-commodities are quietly rising to add more pressure onto your shoulders.

We're here to demystify non-commodities, the various charges that make up the majority of your bill every month - and explain what you can do to manage them.

In this article:

• Learn what non-commodities are, including the key terms you need to understand.
• Understand what you're paying for each month.
• Assess how rising non-commodity costs will affect your business energy bill.

What are non-commodities on a business energy bill?

• Commodity costs - 40%: This is the wholesale price of the electricity or gas your business uses. It rises and falls with global markets.
• Non-commodity costs - 60%: These are compulsory third-party charges, set by government, regulators and network operators, plus taxes and levies. They cover the cost of running the networks, funding renewable schemes, and making sure supply is reliable.

Non-commodity charges are not optional, but they’re not random either. Our simple guide to business energy offers more guidance if you're looking into this for the first time.

What are the main non-commodity charges?

• TNUoS (Transmission Network Use of System): The cost of building, running and upgrading the high-voltage grid that moves power across the UK. These charges are expected to rise in the coming years. They affect business and domestic bills.
• DUoS (Distribution Use of System): This pays for local networks—the cables, substations and repairs in your region. Costs differ depending on location.
• BSUoS (Balancing Services Use of System): This pays for keeping supply and demand balanced in real time, including sudden outages or constraints.
• CfD (Contracts for Difference): CfD offers long-term price support for low-carbon generators, giving them stability and encouraging investment.
• RO (Renewables Obligation): An older scheme for large renewable projects. It closed to new entrants in 2017, but existing contracts run into the 2030s, so it still appears on bills.

• CM (Capacity Market): CM ensures backup electricity is available during peak demand, reducing the risk of blackouts.
• FiT (Feed-in Tariff): This recovers the cost of small-scale renewables supported under the scheme, such as rooftop solar.
• CCL (Climate Change Levy): An environmental tax charged on business energy use.
• EII Support Levy: This covers the compensation scheme relief given to energy-intensive industries.
• AAHEDC (Assistance for Areas with High Electricity Distribution Costs): A charge to help cover higher distribution costs in the North of Scotland.
• Nuclear RAB (Regulated Asset Base): A charge that helps fund the development of new nuclear power stations.

How non-commodity charges are changing

Looking ahead, several trends are clear:

• TNUoS (Transmission charges) will keep rising as the UK reinforces its grid to connect more renewables. Large increases are expected from April 2026.
• DUoS (Distribution charges) will vary more sharply by region, reflecting local investment needs.
• Support schemes like CfD and the Capacity Market will remain, ensuring funding for new low carbon generation and system security.

• Nuclear RAB is a new charge applied since November 2025, initially to cover funding for construction of new nuclear plants. This charge may rise with initial tariff only agreed to 2027 by Ofgem.

The overall picture: non-commodity charges are likely to increase, even if wholesale prices settle. For SMEs, this means bills may not fall as much as expected when commodity markets calm down.

How to reduce non-commodity costs

You can’t remove non-commodity costs, but you can manage their impact. Here are practical steps:

1. Request a clear breakdown: Ask your supplier to show you what each charge means. Turning jargon into plain English helps you see where the weight of your bill lies.
2. Check usage patterns: If high-demand tasks can be moved away from peak DUoS periods, you’ll reduce exposure to higher charges.
3. Focus on efficiency: Every unit you don’t use reduces both commodity and non-commodity costs. Think lighting upgrades, better heating controls, or equipment checks.
4. Weigh up renewables: On-site generation can be a tool to help avoid non-commodities. The less electricity you buy from the grid, the less exposure you have to many of the network and system charges included in your bill.
5. Review contracts carefully: Some contracts pass through non-commodity charges directly, others include them in fixed rates. The right choice depends on how predictable you want your bills to be.
6. Plan ahead: Non-commodity charges are rising. Building this into your budgeting means fewer surprises later.
7. Seek independent advice: An impartial review can flag hidden costs, show how charges are changing in your sector, and suggest quick actions.

This article is part of our Business Energy Basics series. Now read...

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