For many organisations, energy procurement has traditionally focused on securing the best commodity rates. However, non-commodity charges now make up a significant proportion of electricity bills, and recent changes introduced through Ofgem’s Targeted Charging Review (TCR) mean that inaccurate energy data can have a much greater impact on network charges than ever before.
Recent industry discussions have highlighted growing concerns around Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges, particularly where batteries, on-site generation and incorrect metering data are involved. As network charging evolves, ensuring your energy data is accurate is becoming increasingly important.
What Is Ofgem’s Targeted Charging Review?
The Targeted Charging Review was introduced by Ofgem to address concerns that some electricity users were avoiding network charges through behind-the-meter generation, batteries and demand management techniques.
Historically, many network charges were based on consumption during specific peak periods. This meant organisations could reduce their share of network costs by strategically lowering demand during those windows.
Ofgem concluded that this approach was becoming increasingly unfair, as the costs of maintaining the UK’s electricity infrastructure were being shifted onto those unable to invest in flexibility technologies.
The result was a major overhaul of network charging arrangements. Rather than being driven primarily by peak-time consumption, many charges are now recovered through fixed or capacity-based mechanisms. This means businesses can no longer avoid significant portions of network costs simply by reducing consumption during certain periods.
While the reforms were designed to create a fairer system, they have also increased the importance of accurate metering and asset data because suppliers and network operators now rely heavily on recorded site information when calculating charges.
Understanding TNUoS Charges
Transmission Network Use of System charges help fund National Grid’s high-voltage transmission network, which transports electricity around Great Britain. Traditionally, larger consumers could reduce their TNUoS exposure by avoiding consumption during Triad periods, the three half-hour settlement periods of highest national demand during winter.
Following TCR reforms, most organisations now pay TNUoS through fixed daily charges determined by site characteristics rather than actual consumption during Triads. From April 2026, further reforms are continuing to reshape how these charges are recovered, with TNUoS increasingly reflecting a site’s agreed capacity and connection arrangements rather than solely its energy usage.
As a result, incorrect site classifications, inaccurate meter information or unreported assets can all influence the charges being applied.
Understanding DUoS Charges
Distribution Use of System charges fund the local electricity distribution networks operated by Distribution Network Operators (DNOs), responsible for delivering electricity directly to homes and organisations.
DUoS charges cover the cost of maintaining, upgrading and operating these networks and typically include a combination of unit rates, fixed charges and capacity charges.
Recent reforms have shifted more cost recovery away from purely consumption-based charging structures. While DUoS still contains usage-related elements, network operators are increasingly relying on site-specific data to determine the appropriate charges.
This is where data quality becomes critical. If network operators have inaccurate information regarding batteries, generation assets, agreed capacities or metering arrangements, charges may not reflect the true characteristics of the site.
Why Batteries Can Create Unexpected Charging Issues
Battery storage systems are becoming increasingly popular as organisations seek to improve resilience, participate in flexibility markets and optimise energy costs. However, many sites have discovered that batteries can unintentionally distort the data used for network charging calculations.
For example, a battery charging from the grid can appear as additional site demand if metering arrangements are not configured correctly. Similarly, exported electricity may not be properly distinguished from imported consumption. Where metering data does not accurately represent how a battery operates, charges may be based on misleading information.
This can potentially affect capacity assessments, charging bands and network cost allocations. As battery deployment accelerates across the UK, ensuring metering and settlement arrangements accurately reflect site operations is becoming essential.
What Makes Up Your Electricity Unit Rate?
While commodity costs remain the largest component of most electricity contracts, non-commodity charges now account for a substantial proportion of the overall unit rate. The breakdown below provides a typical illustration of how an electricity unit rate may be structured.
Percentages may vary depending on contract type, supplier methodology, location and market conditions.
How Organisations Can Protect Themselves
The changing energy landscape means organisations should no longer view network charges as a fixed or unavoidable element of their electricity bill. Instead, businesses should ensure:
Ofgem’s Targeted Charging Review has fundamentally changed how network costs are recovered across the electricity market. While these reforms were designed to improve fairness, they have also increased reliance on accurate site data.
As TNUoS and DUoS charges continue to evolve, organisations with batteries, on-site generation or complex metering arrangements should pay particular attention to the quality of their settlement data.
With non-commodity charges accounting for a substantial proportion of electricity costs, ensuring network charges are calculated correctly is becoming just as important as negotiating the right energy contract. If you’d like any further guidance on how manage non-commodity costs effectively, dont hesitate to get in touch with our expert team today.
