TNUoS Charge: Who Pays, 2026 Rise, and 2029 Reform

Transmission Network Use of System (TNUoS) charges are the fees that recover the cost of building, maintaining, and reinforcing Great Britain’s high-voltage electricity transmission network. They are paid directly by generators and by electricity suppliers, who pass the cost through to their customers. Alongside straight cost recovery, the charges are set to vary by location, so that siting a power station or a large load in a place that strains the grid costs more than siting it where the network already has room.¹

The practical example most often given: a wind farm in northern Scotland selling into London demand needs hundreds of miles of transmission behind it. Generators in areas where output far exceeds local demand pay more; generators in the south-east, where local demand outstrips local generation, pay less, and in some cases the locational element goes negative.²

Who Pays TNUoS Charges

Two groups pay directly: generators connected to the transmission system, and electricity suppliers. Large industrial demand users connected directly to the transmission network pay, as do certain embedded generators. Distribution network operators and interconnectors are exempt.³

For a typical low-voltage business customer, TNUoS made up about 7% of the total electricity bill as of April 2026, which is the third-largest third-party cost on the invoice and roughly 18% of all network charges.⁴

How the Charges Are Calculated

Tariffs are produced through a model called DC Load Flow Investment Cost Related Pricing, which estimates the incremental cost of expanding the network if capacity were added at a given point. The model divides Great Britain into geographic zones and produces separate tariffs for generators and for demand.

Generators

Generators are charged on their Transmission Entry Capacity, the maximum power they are contracted to export to the grid. The tariff has several components: a local circuit charge, a local substation charge, a wider locational tariff that varies across 27 zones, and historically a residual element. Total generator charges are capped at €2.50 per megawatt-hour under European rules.²

Suppliers and Demand Users

The demand side works very differently now than it did a few years ago. Before April 2023, large half-hourly metered sites were charged on their consumption during the three “triad” half-hours of highest national demand each winter. That mechanism drove an entire industry of peak-avoidance load reduction.⁵

Following Ofgem’s Targeted Charging Review, most demand-side TNUoS is now recovered through fixed daily standing charges set in bands. Half-hourly metered sites are banded by agreed supply capacity; non-half-hourly sites are banded by volume.⁶ A small residual locational element, roughly 3% of total TNUoS costs, still uses the triad methodology, but it is floored at zero in many regions, so triad avoidance is no longer a meaningful cost-reduction strategy.⁵ For most business customers the visible effect is a higher standing charge and a lower unit rate. Ofgem projected total consumer savings of £4 to £5 billion through 2040 from the reform.⁷

Geographic Variation

As of 2026 the locational element of the demand charge ranges from zero in Scotland and northern England to the highest levels in London and the south-west. The East Midlands was exempt from the locational charge, but NESO forecasts that exemption will end in 2027.⁴

Who Sets the Charges and When They Change

The National Energy System Operator (NESO) calculates and administers TNUoS. Final tariffs are published annually by 31 January and take effect on 1 April of the same year. Quarterly updates and five-year forecasts give industry advance notice.³

The methodology sits in Section 14 of the Connection and Use of System Code (CUSC), which operates under transmission licence conditions granted under the Electricity Act 1989. Any change to the methodology goes through an industry code modification process and needs Ofgem approval.⁸ Ofgem also sets, through its price control process, the allowed revenues that transmission owners can earn, and those revenue allowances feed directly into how much TNUoS has to collect.⁹

Why Bills Rose Sharply in 2026

TNUoS charges climbed significantly from April 2026 with the start of the RIIO-ET3 price control. In December 2025, Ofgem published its Final Determinations for the five-year period running April 2026 to March 2031, setting total projected price control revenue at £46.2 billion. Total price control revenue was expected to jump from £4.3 billion in 2025-26 to £7 billion in 2026-27.¹⁰

For the 2026-27 charging year, the finalized average TNUoS rate increase was 62.34%, which translated to roughly an 11% increase on the overall electricity bill for a typical 1 GWh commercial consumer. That was lower than an initial forecast of over 100%, partly because Ofgem reduced allowed revenues in the first two years of the control period to soften the short-term impact.¹¹ For a typical domestic customer, the annual transmission standing charge was projected to rise from around £42 to £62 in April 2026.¹⁰

The money is intended to fund roughly 80 transmission projects expanding capacity, improving security, and accommodating new renewable connections. Ofgem projects that by 2031 those network improvements will offset some bill costs by cutting constraint costs, which were estimated at £4 billion in 2030 alone.¹⁰

Reform Coming by 2029

The UK government and Ofgem are pursuing a fundamental overhaul of TNUoS as part of the Review of Electricity Market Arrangements. In its summer 2025 update the government confirmed it would keep a single national wholesale electricity market, rejecting zonal pricing, and committed to reforming TNUoS to give stronger and more predictable locational investment signals. It set a target of delivering the reform no later than 2029 and said it would legislate to give the Secretary of State and Ofgem faster powers to change the codes and licences involved.¹²

In an open letter published in July 2025, Ofgem outlined the direction it is exploring: fixing TNUoS charges at the point of investment for a defined period, potentially the life of the asset, so developers get long-term certainty; charges that reflect available grid capacity in the year of connection, to steer new generation and storage toward areas with spare headroom; and premiums and discounts for demand-side users such as data centers, batteries, and hydrogen electrolyzers, tied to whether they reduce or increase the need for grid upgrades.¹³ NESO’s Strategic Spatial Energy Plan, a national framework mapping where energy infrastructure should sit between 2030 and 2050, is intended to sit underneath the reformed charging regime.¹⁴

An industry attempt to blunt volatility in the meantime was blocked. CMP444 proposed a cap and floor on the wider generation TNUoS tariffs, motivated by NESO projections that charges for generators in northern Great Britain could roughly triple between 2025 and 2033. Ofgem issued a minded-to rejection in July 2025 on the grounds that caps and floors would weaken the locational signal, and published its final decision rejecting all versions of the proposal in October 2025.¹⁵

TNUoS Is Not BSUoS

TNUoS is sometimes confused with Balancing Services Use of System (BSUoS) charges, which also sit on electricity bills. TNUoS recovers the capital and maintenance cost of the physical transmission network. BSUoS recovers the day-to-day cost of keeping the system balanced in real time, such as payments to generators to turn up or down to match supply and demand.¹

1
NESO. Charges for Using Great Britain’s Electricity System
2
SSE Transmission. TNUoS Charging Paper
3
NESO. TNUoS Charges
4
Drax Energy Solutions. Third Party Costs Explained: TNUoS
5
Drax Energy Solutions. End of Triads: TNUoS Charges Changing
6
Shell Energy. About the Targeted Charging Review
7
Ofgem. Targeted Charging Review: Full Decision
8
NESO. CUSC Code Documents
9
Ofgem. TNUoS Cashflow Timing Consultation
10
Drax Energy Solutions. 2026 TNUoS To Increase: RIIO-ET3 Determinations
11
NUS Consulting. NESO 2026-2027 TNUoS Rates
12
UK Government. Review of Electricity Market Arrangements: Summer Update 2025
13
Ofgem. Open Letter: Reforming Network Charging Signals
14
techUK. Strategic Spatial Energy Plan Webinar With NESO
15
Ofgem. Minded-to Decision on CMP444