The National Energy System Operator (NESO) has just published draft costs for balancing charges on electricity bills from next spring. The period beginning April 2027 could see balancing costs jump to £21.67/MWh – a 74% increase on the previous rate.
Balancing services keep the electricity grid running at the correct frequency (50 Hz) by continually adjusting the amount of power sent to the grid. This is essential for preventing outages and avoiding damage to network infrastructure. NESO passes on the costs through Balancing Services Use of System (BSUoS) charges.
How BSUoS charges are changing
| Period covered | Cost per MWh |
Fixed Tariff 8 | October 2026 – March 2027 | £12.49 |
Draft Tariff 9 | April 2027 – September 2027 | £21.67 |
Draft Tariff 10 | October 2027 – March 2028 | £18.42 |
NESO normally sets BSUoS rates well in advance, to help businesses budget for these costs on their bills. However, in the first half of this year, high energy prices and increased volatility meant that NESO spent more than expected on balancing the grid.
The Hub reported in July that NESO was facing a funding shortfall and considering the unusual step of putting up October’s rates despite having already confirmed them. But NESO decided against this, keeping rates at £12.49/MWh for the six months from October.
Clawing back costs
Businesses will welcome not having to deal with an unexpected increase from October 2026 to March 2027. But keeping BSUoS charges as planned for tariff period 8 will leave NESO with a cumulative deficit of £1,062m. The big increases in BSUoS charges across the next two tariff periods are necessary to eliminate that deficit and recover NESO’s costs to date.
Tariff period 9 runs from April to September 2027, and this is when NESO expects BSUoS charges to rise to £21.67/MWh. The draft charges for tariff period 10 are set to drop to £18.42/MWh – still significantly higher than businesses are used to.
NESO will confirm the final figures for tariffs 9 and 10 in December 2026.
Budget headache
For most UK businesses, non-commodity costs like balancing charges make up a significant portion of their energy bills. With wholesale energy costs also rising, the expected hike in BSUoS costs will come as unwelcome news.
If you’re looking to control your non-commodity costs or need advice, get in touch with the Sustainable Energy First team via the contact form below.
