The Energy Advice Hub is powered by Sustainable Energy First – the UK’s leading energy and carbon consultancy.
Every business energy bill comes with a number of charges separate from the actual cost of the gas or electricity. The rest of what you’re paying comes from non-commodity charges, also known as non-energy charges.
These extra costs actually make up more of your electricity bill than the electricity itself. Here’s our quick guide.
Why we have non-commodity charges
The government needs to cover the costs of maintaining the electricity grid, balancing supply and demand, developing new generation capacity and so on. Rather than raising that money through general taxation, the government requires energy suppliers to add specific charges to customers’ bills.
The supplier who bills you with these charges is doing it on another body’s behalf and doesn’t get to keep the money, so these charges are sometimes called third-party charges or pass-through costs.
Types of non-commodity cost
The charges fall into roughly two categories:
- Covering the costs of running the grid
- Supporting green generation
Grid-related charges
- TNUoS stands for Transmission Network Use of System and goes towards the cost of the long-distance, high-voltage electricity transmission system. The transmission network carries electricity from generation sources to distribution networks. We recently reported that TNUoS tariffs are set to rise sharply from April 2026 because we need to upgrade the grid to support more renewables.
- DNUoS stands for Distribution Network Use of System and goes towards running the local distribution networks which take electricity to the consumer.
- BSUoS is for Balancing Services Use of System. It pays for keeping supply and demand balanced on the grid.
- Capacity Market (CM) charges pay towards the system which ensures the UK has enough energy to meet future demand.
- Metering charges cover the cost of installing and maintaining meters.
Green charges
A number of pass-through costs on your energy bills relate to reducing carbon or supporting the creation of renewable generation capacity.
Contracts for Difference (CfD) is the government’s main scheme for supporting renewable generation in Great Britain. It operates through yearly auctions where eligible generators bid for contracts. As we reported in July 2025, CfD is being reformed to make it more attractive to generators.
The Feed-In Tariff (FiT) scheme rewards small generators for producing green electricity. Like the Renewables Obligation, it has closed to new capacity but the existing generators still get paid and that’s why you will still see a FiT charge on your bill.
The Green Gas Levy funds the Green Gas Support Scheme (GGSS). The UK’s gas grid used to just deliver methane from fossil fuel sources, but the mix is changing to include an increasing amount of biomethane from anaerobic digestion. The GGSS pays the producers of this biomethane.
The Renewables Obligation (RO) was designed to encourage the creation of new green generation sources. The RO scheme stopped paying for new generation capacity in 2017, but it is still running to help pay for electricity from existing green generators. Every supplier has to show Ofgem a certain number of Renewables Obligation Certificates (ROCs) for every MWh of electricity they sell. They buy the ROCs from eligible generators in the scheme or secondary sellers. Alternatively, suppliers can pay into a buy-out fund. Either way, this is a cost that they pass on to customers in the form of a non-commodity charge on your bill.
The Climate Change Levy (CCL) is different from most non-commodity charges because it’s a straightforward tax that goes directly to the government. It’s designed to encourage businesses to reduce their energy use and become more sustainable. Businesses can get a reduction on their CCL payments by participating in the Climate Change Agreements scheme and meeting targets for carbon reduction.
A big chunk of your bill
At Sustainable Energy First, we estimate that, on average, non-commodity costs make up around 65% of business electricity costs and 30% of gas costs. This reflects the fact that every unit of gas or electricity a business uses comes with an array of extra costs beyond the wholesale price of the fuel itself.*
For businesses in energy-intensive sectors, the cost of non-commodity charges can be a challenge to competitiveness. That’s why much of the government support for energy intensive industries (EIIs) is based around ways to reduce or remove non-commodity charges for businesses in these sectors. But the infrastructure and generation capacity has to be paid for somehow, so the cost is borne by other customers.
Businesses that don’t qualify as energy-intensive also subsidise EIIs more directly, through the EII Support Levy. This raises funds for the Network Charging Compensation Scheme, which gives EIIs a discount on their TNUoS, DUoS and BSUoS charges.
Third-party charges are a non-negotiable part of business energy bills, but it’s always worth getting an expert to look at your billing. They can:
- Confirm that you’re paying the correct non-commodity charges
- Tell you if your business is eligible for any relief on these charges
- Check that you’re being billed correctly for your energy use.
*Actual proportions vary between sites depending on factors such as location, usage, and supply type.
To talk to the experts at Sustainable Energy First, contact us.
