Network charges and agreed capacity

NESO published the final 2026/27 transmission tariffs on 30 January 2026. The volume-weighted average residual increase is 64 per cent from April 2026. Across individual capacity bands the increase ranged from 28 to 116 per cent.

These are final published tariffs rather than forecasts. Further annual increases are planned through to 2030/31, funding the transmission investment programme approved under Ofgem’s RIIO-3 price control. Ofgem’s Final Determinations of 4 December 2025 approved £28.1bn of upfront expenditure across electricity transmission, gas transmission and gas distribution, within a wider investment pipeline of around £90bn over the five years to 2031.

Status: LawThis is regulated cost recovery applied equally to every supplier. No supplier can tender it away.

Ofgem’s Targeted Charging Review moved most transmission residual charging and around half of distribution residual charging away from usage and into fixed bands. For half-hourly metered sites, the band is set by agreed capacity.

The larger the capacity you reserve, the higher the band, and the higher the fixed charge, before a single unit is used. The bands were reviewed alongside the new price control in April 2026, so a site that sat comfortably in one band may now sit in a higher one for exactly the same operation.

Excess capacity is charged every day on every kVA reserved, used or not. It can also cost a second time, through the band: capacity feeds the average that sets which residual band a site pays for.

The residual bands took effect on 1 April 2026 and hold until 31 March 2031. A site stays in its band for the whole period, and one allocation drives both the TNUoS and DUoS residual charges.

Capacity is usually set when a site is built or fitted out and then left untouched for years while the operation changes around it. Over-provision is common and rarely looked at.

Reducing agreed capacity lowers the capacity charge from the date of the change. It does not move the site to a lower residual band before April 2031, but it does lower the average capacity that sets the band from then.

Two points of judgement matter.

Headroom is essential and excess is waste. Capacity must cover the genuine peak with safe headroom, and must allow for any on-site generation being unavailable. If the unit is down, the grid carries the whole load. Sizing too tight risks penalty charges on the peak day.

Review before you renew. A reduction takes effect going forward and can take up to four months through the network operator. It does not recover a fixed standing charge already committed in a contract. The time to right-size is before you sign.

Status: LawSet by DCUSA Schedule 32 and NESO’s residual guidance.

The next residual bands start on 1 April 2031. Network operators must submit the capacity data for that banding by 31 March 2028, and each site’s band is confirmed to suppliers by 30 June 2028.

Allocation uses the site’s average agreed capacity over 24 months. The network operators have agreed the exact period between them; on the timetable in the rules it closes around the start of 2028, which means it is very likely running already. Every month at a lower capacity inside that window counts, and a reduction made late in 2027 barely moves the average.

A site can only change band before 2031 in defined circumstances, principally a change of use or configuration that moves agreed capacity or consumption by 50% or more, supported by a director’s letter. Trimming headroom from an unchanged operation does not qualify.

1. 01Analyse. Half-hourly demand, true peak, power factor and current band, from your own data. We assess the peak on the half-hourly record, never on a momentary spike, and we do not recommend a reduction without a full year of it.
2. 02Size safely. A conservative capacity with genuine headroom, allowing for generation downtime and any known load growth such as EV charging, new kitchen plant or electric heat.
3. 03Apply. The application goes to the distribution network operator, not the supplier, who only passes the charge through. We complete and manage it.
4. 04Confirm. Check the lower capacity charge flows through to your bills.

The review itself is free. If it finds a worthwhile reduction and you ask us to complete the work, we charge up to 25% of the first year saving, agreed in writing before we start, and the network operator application is included. If the review finds no worthwhile reduction we will say so plainly, and you pay nothing.

Our remuneration is shown openly. The fee is an Omnium management fee and is never described as a network charge.

Where a site’s power factor is poor, that is a separate matter with its own charges and its own remedy. We flag it on its own rather than folding it into the capacity figure.