How These Affect a Business Energy Bill
Business energy prices are split into two main components:
Commodity Costs
The wholesale electricity price.
Non-Commodity (TPC) Costs – all the charges listed above.
Non-commodity costs can make up over 60% of a total electricity bill for many businesses. Suppliers may either: Pass these through transparently (itemised on the bill), or
Include them within a fixed price (bundled into the unit rate).
Overview – Third Party Costs (TPCs)
Third Party Costs (TPCs) are regulated, non-commodity elements of an electricity bill.
They cover the cost of delivering, balancing, and supporting the UK electricity system, as well as funding government energy and environmental schemes.
Suppliers collect these charges and pass them on to network operators, the National Grid, or the government.
Network & System Charges
DUoS Distribution Use of System Cost of using local distribution networks (owned by DNOs) to deliver power to end users. Covers network maintenance, operation, and upgrades. Distribution Network Operator.
TUoS / TNUoS
Transmission Network Use of System Charges for using the high-voltage national grid to move power from generation to distribution networks. National Grid ESO.
BSUoS
Balancing Services Use of System Reflects costs incurred by National Grid ESO to balance supply and demand in real time. Includes reserve generation, constraint management, and frequency control. National Grid ESO
Elexon Balancing and Settlement Administration Cost of operating the Balancing and Settlement Code (BSC), which ensures all energy traded matches what’s consumed.
Government / Environmental Levies
Charge Full Name Description Purpose / Beneficiaries
CfD Contracts for Difference Supports investment in low-carbon electricity generation (wind, solar, nuclear). Generators receive a stable “strike price” for energy produced. Low-carbon generators.
CM Capacity Market
Pays generators and demand-response providers to be available during peak demand, ensuring security of supply. Capacity providers.
RO Renewables Obligation
Encourages renewable electricity generation by requiring suppliers to source a set proportion from renewables. Renewable generators.
FIT Feed-in Tariff
Pays small-scale renewable generators (solar panels, wind turbines) for electricity they generate and export. Small-scale renewable producers.
EII Exemption Energy Intensive Industries
Exemption Certain high-usage industries (e.g., steel, chemicals) are exempt from a portion of renewable levies (CfD, RO, FIT) to remain competitive. Eligible large industries.
CCL Climate Change Levy
A government tax on energy supplied to businesses, designed to encourage energy efficiency and reduce carbon emissions. HM Revenue & Customs