Do you know what you’re paying for? All about NCCs
Non-commodity costs (NCCs) now make up over 60% of the average electricity bill for many SMEs in the UK. Yet most businesses don’t even know they’re paying them, let alone what they’re paying for.
When it comes to NCCs, most businesses don’t know what they're paying for.
Non-commodity costs (NCCs) now make up over 60% of the average electricity bill for many SMEs in the UK. Yet most businesses don’t even know they’re paying them, let alone what they’re paying for.
And it’s no wonder. These charges are laden with acronyms and jargon, obscure timings, and few straight answers. Let’s pull back the curtain.
What are NCCs, and why are they growing?
NCCs cover everything that gets electricity to your site.
They include charges like:
Distribution Use of System (DUoS)
Balancing Services Use of System (BSUoS)
Contracts for Difference (CfD)
Climate Change Levy (CCL)
And now, the Nuclear RAB Levy — not a charge, but a new tax that will be introduced in December to fund Sizewell C nuclear construction
These are legitimate costs that keep the grid running and support the move to net zero. But the real issue isn’t the cost. It’s the uncertainty.
When charges change without warning, businesses can’t plan. Budgets slip, investments stall, and prices rise just to stay afloat. Costs appear without explanation. Suppliers bundle them in different ways. And there’s still no straightforward way to see what’s fair.
In our 2024 New Energy Blueprint report, we saw how damaging that lack of visibility really was, especially for small and mid-sized businesses already feeling the pressure.
58% of businesses said high energy costs forced them to reduce their profit margins, while 97% were unaware of the number of intermediaries that drive up energy costs.
In a cost-sensitive market, businesses shouldn’t have to carry the risk of hidden or unpredictable NCCs. We stand with them in calling for a fairer, more transparent system, one that supports British businesses instead of undermining them.
How much are we talking?
For a medium-sized business consuming 50,000 kWh a year, £5,000–£6,000 of the annual bill goes to things that aren’t the electricity itself.
And yet most suppliers only show one bundled price. When you can’t see what you’re paying for, you can’t plan.
“Every step we take towards a cleaner, more resilient energy system has a cost, and the reality is that money has to come from somewhere. Investment in new transmission lines, nuclear power, and backup capacity are not optional extras – they are the backbone of the UK’s future energy security. Without them, we risk higher volatility, and even greater long-term costs.
“But the way those costs fall matters. Right now, there is a real risk of a system where some businesses are protected while others shoulder the full weight of rising charges.”
- Dr Craig Lowrey, Principal Consultant at Cornwall Insight
Being upfront about NCCs
Not all suppliers are transparent. And that’s part of the problem. While NCCs are set by government or system operators, how they’re shown (or hidden) is up to individual suppliers and brokers.
Some show each charge clearly and pass them through at cost. Others bundle them into a single unit rate, making it impossible to see where your money goes. And some quietly add markups to these pass-through charges without ever saying so.
That means two businesses on the same street, using the same amount of energy, can end up with completely different bills. One knows exactly what they’re paying for. The other gets a nasty surprise.
And when you don’t know what you’re paying for, you can’t take control of your energy costs.
Even worse, suppliers don’t have to show NCCs upfront in quotes or contracts. A deal that looks competitive on paper can end up costing £2,000–£5,000 more over a 12-month term, especially when charges like Balancing Services (BSUoS), Contracts for Difference (CfD), or the new Nuclear RAB levy change mid-contract.
And because these costs shift so often, sometimes quarterly, sometimes even monthly, businesses are left chasing a moving target, with little notice and no easy way to plan.
Why it matters for communities
NCCs affect everyone, from farms in Norfolk to cafés in Glasgow. When local businesses can't plan, they can’t grow. When billing isn’t transparent, trust erodes.
“Some of the modelling we have suggests that you could get to a position by 2030 where if the wholesale price was zero, bills would still be the same as where they are today because of the increase in non-commodity costs.”
- Chris Norbury, CEO of E.ON UK
Where tem stands
We believe transparency isn’t optional. It’s the baseline for a fair energy system.
Here’s how we approach it:
Clear, line-by-line breakdowns on every bill, so you know exactly where your money goes.
No hidden uplifts on NCCs. We pass them through at cost — always.
Push for reform. NCCs should be flat, fixed, and equal for all businesses, regardless of supplier.
A better model through RED™. By connecting businesses directly to generators, RED™ removes wholesale guesswork and unnecessary fees.
So far, RED™ has delivered £30m+ in value to over 3,000 sites across the UK, a direct result of removing hidden costs and increasing clarity. Because clarity shouldn’t be a luxury, it should be how energy works.